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.
925 699 5041
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.
Legal Assistant - Realtor
Volo Law - Legal Realty
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.
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,
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.
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.
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.