Financing in San Ramon>Question Details

Kv7347, Home Buyer in San Ramon, CA

My credit scores are in the low 600s. Is it still possible to get a mortgage loan? What about with a co-signer?

Asked by Kv7347, San Ramon, CA Thu Jun 2, 2011

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I am trying to buy a short sale home under 30 k with 10 k down payment . My credit score is 570.
What are my chances of getting the balance financed ?
0 votes Thank Flag Link Mon Aug 27, 2012
Hi,

Wanted to let you know I am now affiliated with a firm who has specialized loans.
FHA loans with ficos under 600. The lower your fico the more you need as a downpayment.

JoAnna Jensen
Legal Assistant
Realtor
Volo Law
925 699 5041
Web Reference: http://vololaw.com
0 votes Thank Flag Link Thu Jul 7, 2011
Hi,

Depending in your scenario you may be able to buy a home with a score as low as 500.

You most likely will have a higher rate and will need a larger down payment.

also you will need to not have any late payments for the past 12 months.

There is also private money who is not as concerned with credit score but you will pay a higher interest rate as well as a few points up front.

Lease options could also be an excellent way to get into a home.

JoAnna Jensen
Legal Assistant - Realtor
Volo Law - Legal Realty
Web Reference: http://www.vololaw.com
0 votes Thank Flag Link Fri Jul 1, 2011
Wells Fargo Bank can with a credit score of 600 with 3.5 % down payment. They also have a 500 FHA loan with a down payment of 20%. As long as you do not have any recent collections or late payments. Good luck!
0 votes Thank Flag Link Fri Jun 3, 2011
There is a program available to people with low scores such as yours. I am a certified agent through them but you will have to take one class in order to qualify....Please let me know if you would like more information. Thank you and Good luck
0 votes Thank Flag Link Thu Jun 2, 2011
Do they do NY?
Flag Thu Jun 16, 2016
Kv7347:

The average qualifying mid FICO right now is at 620 (depending on lender). If you bring a co-borrower (co-signer) into the picture, even if his/her scores are on the 800s, whoever has the lower middle FICO between all borrowers, that score will be used for qualification.

Also remember that we need to factor in income and debt of all borrowers to determine if the ratios are within the acceptable guideline.

I would suggest to speak with a local lender so he/she can assist and run the actual numbers for you.

Good luck!

Eugene
0 votes Thank Flag Link Thu Jun 2, 2011
Hi...

I refer co-signers to co -borrowers now. There credit qualified the same way as the borrower. FHA loans average a 620 FICO. If you have pulled your credit it would be good to look at it and evaluate if your report can be re scored etc. I would be happy to help you with the process free of charge.

Contact me anytime,

Brian
Web Reference: http://www.loansquawk.com
0 votes Thank Flag Link Thu Jun 2, 2011
A co-signor does not solve a credit issue in my shop, however, some lenders may offer different programs. Assuming someone cares about you enough to co-sign, are you aware tying their credit to yours can damage their credit rating? I have turned down several loans this year because the parents co-signed for a child and it wrecked the parents credit report.

If the low credit score is caused by late payments it will be difficult to over come, if they are caused because balances on credit cards exceed 75% of the limit that is easy to fix. I had an applicant recently that owed $450 on a card with a $500 limit, paid it down to $100, fixed the problem. Good luck.
Web Reference: http://jamessimms.com/
0 votes Thank Flag Link Thu Jun 2, 2011
With an FHA mortgage, you can have a non-occupant co-borrower.

To determine whether or not you can qualify for a mortgage, and whether or not you need a co-borrower, you should apply for a mortgage pre-approval with a mortgage lender or broker in your area. The Mortgage Originator will need copies of your paystubs, bank statements and W2s as well as run your credit report to determine whether or not you'll be able to qualify for a mortgage.
0 votes Thank Flag Link Thu Jun 2, 2011
Where exactly in the "low 600s"? 640 is about the lowest you can have and still qualify. If you have a co-signer, who has better credit, that might be a better way to go. I have a great lender who could prequal you very quickly over the phone, so you can see where you're at.
0 votes Thank Flag Link Thu Jun 2, 2011
Kv - it depends on what is bringing your scores down to the low 600's, and when it happened. Charge-offs/collections? Late payments? BK? Foreclosure?

When there are multiple people on the loan, the lowest score as well as the credit histories from all applicants still needs to meet the requirements for the loan program you are qualifying for. So if your credit prevents you from buying a home, adding someone with excellent credit will not help (other than the situation where there aren't enough minimum trade lines). Adding someone to the mortgage with excellent credit can help make the underwriter feel better about the overall quality of a loan, as they know that someone with excellent credit likely wouldn't co-sign unless they were also going to make sure the payments were being made... that applies in borderline situations, where the borrower barely meets all hard requirements, but the underwriter still isn't feeling great about the loan, so they may look for some compensating factors such as having a co-signer with excellent credit.

When you have a co-signer on a loan, in addition to your income & debts that need to qualify, their income & debts also need to qualify. If they have a lot of debt/not much income, but happen to have excellent credit, then they could help out with the credit aspect but hurt the overall debt to income ratio. Adding a co-signer doesn't necessarily always help, so have your loan officer speak to the co-signer about their situation before planning on qualifying that way.
0 votes Thank Flag Link Thu Jun 2, 2011
There are other factors besides credit that determine mortgage qualification; therefore do visit with any qualified loan officer, after reviewing your overall financials, credit and debt a determination on qualification can be made, with or without a cosigner; if you don't yet qualify, he/she may offer great suggestions as to what needs to be done in order to qualify in the near future.
0 votes Thank Flag Link Thu Jun 2, 2011
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