Financing in 27886>Question Details

Stephanie2212, Home Buyer in 27886

My husband and I have credit scores of 600 and 605. Is there ANY mortgage options that would qualify us?

Asked by Stephanie2212, 27886 Sun Feb 26, 2012

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Stephanie2212-

If you are looking to do an owner occupied loan, some lenders will go down to a 600 FICO score on an FHA loan. Minimum 3.5% down. If you have at least 10% down, some lenders will go to a 580 on FHA. It is best to find a mortgage broker in your area since they deal with more than one bank and ask if they have any lenders they work with that will go that low. Most lenders stop at 620 or 640 but there are a few out there.

Andy Gutman, Loan Officer
2 votes Thank Flag Link Sun Feb 26, 2012
Send me an email and I will give you a referral in your State. They go down to 580
1 vote Thank Flag Link Mon Feb 27, 2012
I could be wrong but I don't believe you can do a HomePath loan with a 580 FICO. I am a mortgage broker and I have 7 lenders that do HomePath loans. The minimum FICO allowed is 660 if the financing is above 80% loan to value. You can go as low as a 620 if you put over 20% down but I don't know of anyone going down to 580. Although it would be nice because even with the higher interest rate, since there is no mortgage insurance, the monthly payment almost always pencils out for less.

As I stated earlier, FHA is your best and probably only shot. And there is nothing wrong with FHA.
0 votes Thank Flag Link Tue Feb 28, 2012
HomePath and FHA both allow you to purchase with a 580 score. These require the least down payment. But other lenders will also allow low scores-- depending on your down payment

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0 votes Thank Flag Link Tue Feb 28, 2012
Go to your local non profit housing group for credit counseling. The counselor will go over your credit report with you. They will tell you what you are doing wrong and what you should be doing. Listen to them and when your score is 640+ you can think of buying.
0 votes Thank Flag Link Mon Feb 27, 2012
In most cases lenders prefer to write loans with scores of on less than 620. I would highly recommend that you enlist the help of a local realtor and loan officers. If you belong to a credit union you many want to have a meeting with one of their representatives. I would also look into credit repair. Be sure to pull your own credit if you have not alread done so to ensure it is accurate. consumer credit counseling agency in your area. What ever you do pleae do not fall prey to those who say they can erase bad credit for a fee.
0 votes Thank Flag Link Mon Feb 27, 2012
You can’t get a complete answer from only a piece of the puzzle. Most borrowers fixate on only one point like credit scores, that is not how a loan application is underwritten, it is considered in its entirety.

Many people in the real estate/mortgage industry will suggest credit repair, most (almost all) credit repair companies will tell you to commit fraud and lie about what is in your credit file. They will tell you it is legal to dispute everything on your credit report, not true at all, lying about anything to get a loan is a very serious crime, do not put yourself in harm’s way. Be sure to read up on the link below, hope it keeps you safe, good luck,
0 votes Thank Flag Link Mon Feb 27, 2012
Yes an FHA loan but most likely the lender will have added overlays to the loan ( like max dti, reserves )

I assuming the scores you noted are each of your mid scores from a tri merge credit report. Credit is a snap shot in time and knowing this and how the three credit agencies score can help raise these scores quickly. Find a good FHA lender in your area who also can run what is called credit x-pert, they normally do this free of charge. This will allow you to see if there is anything like paying a debt ( not paying off ) could raise your score.

Hope this is helpful and have a great day
0 votes Thank Flag Link Mon Feb 27, 2012
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