How much time do you have. If you can get one of the companies on board that can help you clean up your credit report 20 points is not a lot to correct. If you can do this and have your lender pull your credit again and accept the new results, this could work for you. Have your lender get you in touch with one of these companies or you can contact me for the information. Best of success to you. I think the 203k may be a little more cumbersome; but could be another option if Homepath doesn't work.
Your Castle Ral Estate
Your FICO score will have an impact even being able to qualify on the HPath Reno for your mortgage interest rate. Even getting your score where you will need it, will still likely yield that and FHA 203K will be better financing for your family for the long-term. Find a lender who can do the streamline and full 203K loan so you don't pigeon hole yourself. Because you can finance more than $35K into the home if needed. And if there are structural issues and you use a lender who only does the streamline 203K then you will be out of luck. Because you can't do structural improvements in the streamline ($35K) 203K mortgage.
Once you look at comparisons with your lender you will see what I am talking about now and 5-7 years into the future. With a 640 you seem to have now you would be eligible for a 203K, and Fannie Mae will still give you the 3.5% seller concession towards closing costs for FHA. You could then look at having your lender pay the 1% FHA (normally financed mortgage insurance) out of this to maximize your financing. The HPath with lower scores means more expensive financing costs to you now and into the future.
But other than that I agree there are things that can be done, unfortunately , to clearly see what can be done, one needs to see the consumer's credit report since there are many variables as to why your score could be where it is.
Summit Home Mortgage Denver
There is a considerable amount of complexity to how credit scores are computed so you might want to be careful about what you do to improve yours. For example, closing a line of credit may seem like a responsible move, but can actually hurt your score. You can check the link below for some basic information. Also, a good credit counselor or a knowledgeable loan broker can help. Sometimes, when you are close to your target score, it is as simple as correcting one or more mistakes on your credit report.
Prudential Real Estate of the Rockies
@Jacob, that is some of the worst advice I've seen in a while. Your profile says ''Home Buyer'' but you're giving mortgage advice and asking people to send you their credit report??? So after they ''Dispute Everything'' how are they to obtain financing on a Home Path property? Does DU like accounts in dispute in your experience?
Cornerstone Mortgage Co.
Fort Collins, CO
I am currently working with a buyer who has a credit score just over 620. She received approval from Key Bank on their KeyCommunity Loan product. Interest rate is great and there is no mortgage insurance!
If you're still looking for a loan give me a call and I'll refer you over to the person I work with at Key Bank.
Mark S. Keene
If you aren't working with a realtor, please contact me at 720.260.7774
SueEllen Naegle, Broker Associate
Sellstate ACE Realty
As others have said, an FHA 203(k) streamline would be a good Plan B.
The first thing you should do is have your lender pull you credit report to see if there are any mistakes. This happens more often than you might think. And getting errors corrected can be a quick fix. Also you lender may be able to give you specific advice about improving your score as quickly as possible.
For more information about credit scores, compiled from several sources, see the link below. Understanding how credit scores work may give yo an insight into improving your score.
Prudential Real Estate of the Rockies