Financing in Houghton Lake>Question Details

Terry O'neill, Home Buyer in Houghton Lake, MI

What is a minimum acceptable credit score for a first time home buyer with 10% down.?

Asked by Terry O'neill, Houghton Lake, MI Mon Mar 11, 2013

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7
I think FHA requires a 580 or 600 score.. Have you tried The Lenders network? I've closed a few loans on referrals from them they help people with lower credit scores get approved for mortgages... Good luck!

http://www.thelendersnetwork.com
1 vote Thank Flag Link Thu Jan 23, 2014
What Credit Score do You Need to Buy a Kentucky Home?

When it comes to mortgages and credit scores, there are two really important questions to ask:

–What credit score do I need to qualify for a mortgage?

–What credit score do I need to get the lowest interest rate on a mortgage?

These different but related questions are important if you are looking to buy a home. And the second question is particularly important. With a high FICO score, you can literally save tens of thousands of dollars in interest over the life of a home loan. So let’s take a look at both questions. And if you don’t know you score, be sure to get you free credit score.

What credit score do you need to qualify for a mortgage?

The first thing to keep in mind is that qualifying for a mortgage involves a lot more than just a credit score. While your FICO score is a very important ingredient, it is just one factor. Lenders also look at your income and level of debt, among other things.

As a rule of thumb, however, a credit score below 640 will make buying a home very difficult. A FICO score below 640 is considered sub-prime. In the past there were mortgage companies that specialized in sub-prime mortgages. Because of the challenges in the credit market over the last year or so, however, sub-prime loans have become difficult if not impossible to obtain.

A FICO score between 600 and 640 is considered fair to good credit. But keep in mind, this range of credit scores does not guarantee you will qualify for a mortgage, and if you do qualify, it won’t get you the lowest interest rate possible. Still, to buy a home aim for a score of at least 640, recognizing that other factors weigh in the decision and that some banks may require a higher score.

What credit score do you need to get a low rate mortgage?

It use to be that a score of about 720 would yield the lowest mortgage rates available. Today, the best rates kick in with a FICO score of 760. And interest rates go up significantly as your credit score drops. To give you an idea, the following table shows current rates by credit score and calculates a monthly principal and interest payment based on a $300,000 loan:

FICO Score & 30-year Fixed Rate Mortgage

FICO Score APR Monthly Payment

760-850 4.643% $1,546

700-759 4.865% $1,586

680-699 5.042% $1,618

660-679 5.256% $1,658

640-659 5.686% $1,739

620-639 6.232% $1,844

Of course, the interest rates change daily, but the above table gives you an idea of the importance of a high score when you apply for a mortgage.

Contact me today and I will pull your credit for free. 502-905-3708 or email me at kentuckyloan@gmail.com

Labels: Credit Score First Time Home Buyer Louisville Kentucky KHC, FHA Loans, FHA Loans Kentucky Housing First time home buyer
Louisville, Ky Mortgage Lenders: Credit Scores FHA Loans Louisville Kentucky KHC First Time Home Buyer Credit Score



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0 votes Thank Flag Link Mon Oct 21, 2013
Hi Terry, Have an experienced ethical loan officer who works for a lender that offers all of the loan types look over your credit. Loan officers work with credit every day and have the incentive to improve the credit as soon as possible so are your best source for home loans. Wait and talk with one before you do anything with your credit. Its easy to do the wrong thing.I have witnessed experience loan officers in many many situations make simple recommedations and have a credit score up in no time. So the key is choosing the loan officer. Read, Consultation Interviewing Loan Officers at Your-Road-Home.com. Gather up all the information you can so you will not only have the right questions to ask the loan officer but will know the right answers. The loan officer and real estate person are critical choices for most people buying homes. Trulia is also a very good source of information and when you are prepared loan officers and real estate agents from your area offer their services on Trulia. A good source. Be sure to read article #9 about the MCC Tax Credit. The best tax credit ever.
Best of Luck, Stephen Webber Retired After 34 Years of Real Estate For First Time Home Buyers
Web Reference: http://Your-Road-Home.com
0 votes Thank Flag Link Fri Jul 19, 2013
500 (FHA) but good luck finding a lender who will actually do it!
0 votes Thank Flag Link Fri Mar 15, 2013
I stand corrected. I was in maximum finance mode. Accuracy is indeed important, it's the least we can provide the consumer.

Realistically I believe its fair to say consumers should expect to need a credit score of perhaps as low as 580, 620 for sure qualifies. Put another way, my advice to a consumer is to be cautious getting into a loan product that allows exceptionally low credit scores.
0 votes Thank Flag Link Fri Mar 15, 2013
Chuck Says:

"HUD guidelines say 580."
----------

This is untrue. HUD says the minimum acceptable credit score with 10% down is 500 not 580. The second part about most lenders requiring a 620 may or may not be true but certainly the first part of the answer is false.

This forum should be about accuracy and it's a shame there isn't more of it so consumers have accurate information.

Reference: HUD 4155.1 4.A.1.c Determination of Credit Worthiness and Minimum Credit Score Requirements.
http://www.hud.gov/offices/adm/hudclips/handbooks/hsgh/4155.…
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Thu Mar 14, 2013
HUD guidelines say 580. Most lenders are going to require 620. If credit is iffy, I head up the credit coaching effort at my company and I would be happy to help you assess your situation.
0 votes Thank Flag Link Thu Mar 14, 2013
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