Financing in 61820>Question Details

Balbee25, Home Buyer in

can I get a loan for no money down with 580 credit score?

Asked by Balbee25, Sat Feb 2, 2013

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Maybe.... If you use the right lender, Talk to a broker first that actually has lenders that can first get a 580 score approved and closed, then look for down payment assistance. I recommend the lenders network, if any company can get you a loan they can. I have had clients with under a 580 score get approved... Brilliant real estate minds with a ton of lending contacts. Tell them I referred you!
4 votes Thank Flag Link Thu Jul 18, 2013
If you could the question is, should you? Lots of people with low scores got loans a while back and now many have lost their homes.
A credit score is a reflection of something about your life. We don't know what or why, and I don't mean to judge you, only your present situation.
My strong advice would be to work on your credit and save some money for a while. Getting a handle on your credit, establishing a budget and preparing for emergencies through a savings plan can pay dividends for years and have you ready to buy a house when you have multiple credit options available.
2 votes Thank Flag Link Sat Feb 2, 2013
Good morning Balbee25,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
1 vote Thank Flag Link Tue May 21, 2013
Some lenders, mine included, will consider a 580 credit score but only with 10% down. Don't know to many that will touch it otherwise. You will pay a much higher interest rate though until your credit score gets to at least 620. Life many have suggested, it might be in your best interest to get your finances in order before you attempt to purchase a home. It will be a lot easier. Underwriting may possibly approve the loan with a 580 Credit score and 10% down but it won't be easy
0 votes Thank Flag Link Tue Jan 20, 2015
Yes,you can get the loan,but the credit scores is not the only the factor,for getting the loan.Take the help of a reverse mortgage lender in your area he will suggest you the correct way for getting the loan.
0 votes Thank Flag Link Tue May 21, 2013
We work with lenders that can go down to 580 FHA here in Illinois. As far as the no money down, you are still going to have to have 3.5% showing in your bank account. You may not have to actually put down the full 3.5% buy you will need to show it.

Sean Cochran
Quality Mortgage Lending
630-330-2229 cell
630-470-6830 office
0 votes Thank Flag Link Mon Feb 4, 2013
A 580 FICO indicates that you have a money management problem. You should be working on that before you think of buying a home. Go to your local non profit housing group for credit counseling. Find out what you have done wrong and what you should be doing. Fix those problems while saving money.
0 votes Thank Flag Link Mon Feb 4, 2013
You never know. My advice would be to get a hold of a mortgage lender and they may help you get your credit score up so that it would be easier to get you a loan in the future.
0 votes Thank Flag Link Mon Feb 4, 2013
Balbee, Thank you for your inquiry. There are 2 lenders in the Champaign, Urbana, Savoy area that recently could finance a 580 Credit score.

As for no money down, the USDA /Rural development loan program offers a no money down loan if the home is not in located in Champaign, Urbana or Savoy. You could utilize the program in surrounding area outside of these locations. I would advise you to speak to a lender who offers this program to address any questions or concerns with this program. Contact me if you would like more information.
0 votes Thank Flag Link Mon Feb 4, 2013
Balbee, unfortunately, across our nation, in current lending practices, i am not aware of any lender nor loan program that will do a mortgage for less than a 600 credit score, no matter what amount you put down. Meeting with certain conscientious loan officers can assist you in what steps to take to expedite raising your FICO score and counsel you in helping you to reach your goals! It is always a wise move to get your financial deficiencies in order!
0 votes Thank Flag Link Sat Feb 2, 2013
There are some downpayment assistance programs for first-time buyers, but all require some down payment from the buyer. HUD homes can do as little as $100 down or you can get a gift for down payment with an FHA loan. You nearly always can get closing costs as a part of a seller concession, so downpayment is the only requirement. However, 580 credit score is usually too low. Most lenders are requiring between 620-640 middle credit score.

But call some lenders and find out what you can do to increase your score and get on the buying path. This can give you some time to save some down payment too.
0 votes Thank Flag Link Sat Feb 2, 2013
I guess anything is possible, but I would have to bet against that happening. Only VA and USDA loans require no money down. You have to be a veteran to get a VA loan and USDA are in certain areas in certain price ranges and subsidized. You won't know for sure unless you ask some loan officers.
0 votes Thank Flag Link Sat Feb 2, 2013
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