Financing in Pocahontas>Question Details

Notaveragebe…, Home Buyer in Pocahontas, AR

is it possible to get a morgage loan with a credit score of 629?

Asked by Notaveragebear55, Pocahontas, AR Sat Jan 9, 2010

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Rudy, you made some very good points. Most importantly that FHA is not the lender, FHA just insures the loan. Investors still will set the criteria that they want to go by.
By the way, I have made the same mistake about location. Then I realized that if you look just below the green banner on the left, you see the state.
0 votes Thank Flag Link Sun Jan 10, 2010
You can get an FHA loan as long as you qualify for the icome requirements. But please note that FHA loans may change drastically this year as they are changes at the leadership of the Fed who think the loans are too plentiful and easy to get, in turn they want to increase the requirements for this type of loan.
0 votes Thank Flag Link Sat Jan 9, 2010
Good points Rudy, for some reason the rest of my explanations after the short sales didnt post, what it said was recently. To get more in depth as Rudy does with his explanation with the FHA and the lender differences does perhaps give more of an explanation. But in layman terms to answer the question , yes you can but it depends.
0 votes Thank Flag Link Sat Jan 9, 2010
Notaveragebe

FHA, in of itself as a institution, has never had a min FICO requirement. Thats because HUD/FHA doesn't directly originate or put up the money to finance the loans. They only insure them up to a percentage of their loan value. Because they actually do originate and put of their money to finance the loans, min. FICO score requirements is a purely a lender criteria and, as I have already said, that requirement will differ from lender to lender. FHA is now considering for the first time to set a min FICO, but in all honesty thats something that been debated for many years now and has only gain media attention due to our current housing crisis.

With regards to number of credit scores, most lenders require at least 2 with the lower of the 2 being the score they will go by. At one time only 1 score was required, but no longer.

With regards to bankruptcies and foreclosures, per FHA guidelines, you can be considered again for a mortgage once you're 2 years out of your bankrupties(if its a Chapter 7). If its a Chapter 13, you may be eligible after only 12 months with court approval). 3 years out if it was a foreclosure. However, your credit history will have to be near spotless afterwards regarding lates, collection (With the exception of medicals) for you to have a chance at qualifying.

Rudy R. McDowell / Senior Loan Officer
NMLS#: 141856
ShoreMortgage
770 S Adams Birmingham, MI. 48009
o: 800-678-6663 Ext 5154 / f:248-594-6156 /d: 313-410-1344
email: rmcdowell@shoremortgage.com
corp: http://www.shoremortgage.com
"Referrals are the Best Indicators of My Service and Your Satisfaction"
0 votes Thank Flag Link Sat Jan 9, 2010
Yes it is, FHA allows you to with a 620. There have been many rumours that FHA will be rising the minimum score to 640 but as of right now that is not the case. And as Robin says, is that your middle score of a three score credit report? Also it depends on how many lines of credit you have with some lenders, many lenders want you to have at least 3 lines of credit with no lifetime events (bankruptcies, foreclosures, short sales)
0 votes Thank Flag Link Sat Jan 9, 2010
Hi, Robin

We handle Arkansa also. Another senior loan officer in our company closed two borrowers in the last couple of months who had 620s and had been turn down by BOA. Of course she had to get their scores up for us to help them first. But that was done by simply paying down some credit cards debt. Chase, Wells Fargo and Flag Star are all 660 now. We'll probably be there ourselves by Spring.
0 votes Thank Flag Link Sat Jan 9, 2010
Rudy, she's in Arkansas, not Arizona.
I thought that Bank of America was still doing FHA down to a 620 score. I tend to have higher credit score borrowers, and don't do that much FHA, so if they changed that in the last month or so, they could be up to 640 now. I thought Chase was at 660.
0 votes Thank Flag Link Sat Jan 9, 2010
Hi, Notaveragebe

With a 629, and if you're not eligible for a VA loan, FHA is the best way for you to go. Its my understanding that some brokers and lenders are still able to do 629. However, the overall minimum industry standard is now 640 or better. What this means is that the lenders which still do 620s are going to charge you a significant premium to do so. This will equate to a higher (1 pt or better) interest rate and the paying of additional discount pts, possibly 2pt or more. With FHA, 1 discount point equates to 1% of your total loan amount, which is your sale price, - your 3.5% downpayment + your 1.75% in Up Front Mortgage Insurance. So if your sale price is 150,000, your total loan amount will be, 147,283.00. With 2 discount pts, that equates to $2,945 in additional closing cost. Not to mention a 1 pt higher interest rate.

Since you only need an additional 11 pts, it may make more sense for you to simply pay down or off a credit card to increase your score and save yourself possibly $2,945.00 by doing so! Apart from being a FHA/VA loan specialist, I'm also a credit repair expert and we offer this service free for our clients. And if its just a simply matter of paying down or off a credit card, removing lates, or correcting a credit line that reporting in error, that can be done typically within 3-5 days. Arizona is one of the 40 states we're licensed to originate loans in and I can assist you in increasing your credit score and subsequently decreasing your closing costs and mortgage payments if you wish.

Rudy R. McDowell / Senior Loan Officer
NMLS#: 141856
ShoreMortgage
770 S Adams Birmingham, MI. 48009
o: 800-678-6663 Ext 5154 / f:248-594-6156 /d: 313-410-1344
email: rmcdowell@shoremortgage.com
corp: http://www.shoremortgage.com
"Referrals are the Best Indicators of My Service and Your Satisfaction"
0 votes Thank Flag Link Sat Jan 9, 2010
I have been trying to correct some things on my credit report and I can't get them taken off? I have a medical discharge on Student loans but I have been listed on my Credit report as late! The report was turned in while my application was being approved. Also, a few years ago, my Hus. and I were forced "due to medical problems" we both became disabled we had to file chapt. 13. One credit card place filed a lien against our home we own, but it had been included in the Chapt. 13 that was paid off. I recently got a letter stating that they were being sued for Fair Credit act violation! We want to buy a home in the Country and have a home to sell but we can't get our credit score up! :(
Flag Mon Mar 31, 2014
Yes, as long as you qualify with income and assets, you can get an FHA loan. Please note that if you got that as your middle score when you ran your own credit, it may not be the number that is used when scores are run for mortgage purposes. The often vary, and more likely are lower than what you get on your own. The credit bureaus cannot really explain why, but they seem to use a different scoring model. Also, the score that is used is the one that is either the lower of 2 scores, or the one that numerically falls in the middle, it is not an average of the 3. So, if you have a 649, 619 & 619, they would use 619, not 629 which would be the average.
0 votes Thank Flag Link Sat Jan 9, 2010
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