There may be lenders that you may be approved through with a credit score around 600. However, most lenders require 620 credit score at least and the rates will not be very favorable. It will be expensive and I would recommend you to really look at your current situation and see if you can improve the scores before you make an important financial decision like buying a house.
There are many different types of financing with different requirements. One of the most popular is the FHA financing which has no minimum credit score requirement. Any minimum is set by the individual mortgage lender and not the FHA (who insures the loan to the lender). Some lenders set 650 or 620, while some 600 and others may even use 580 as their minimum required credit score.
In the March 2011 addition of the Realtor magazine (the National Association Of Realtors monthly publication to it's membership) there is an article that states "Wells Fargo will accept borrowers with credit scores of 500 to 579 if those borrowers can make a down payment of at least 10 percent; gifted funds or other down payment assistance is not allowed. For borrowers with credit scores of 580 to 599, borrowers must put down 5 percent, with the same restrictions on gifts and assistance funds. Borrowers with credit scores of 600 or higher can make a 3.5 percent down payment.
The new policy took effect Jan. 15." Now this is Wells Fargo and not all lenders but with the large volume of loans and so many mortgage brokers brokering loans through Wells Fargo we may might see other lenders following. Also you must keep in mind that credit is not the only criteria that lenders use in determining whether or not they will approve a mortgage loan.
There are numerous reasons a lender may reject a loan application. For instance, even if you have a credit score of 800 and are unemployed and have no visible, verifiable income they more than likely will not grant the loan approval.
I hope this better clarifies some of the possibilities and the need to actually speak with a professional mortgage lender for a pre approval for a mortgage loan. I am always available for further discussion by calling me.
Thank you and good luck,
Yes but that may be doing you more harm than good. Getting approved with a low score costs more. That is a fact and more cash is needed just to pay the higher rate. Next option is seller financeing. If you are serious then you have a budget and have been saving cash. Cash is the most important thing when dealing with seller financing. Never go to a seller without your own agent. My point here is you need to share your real circumstances with your realtor. If you are not at this point yet then you need to set down with someone who can get you both on the right path. I kwow it is normal to want it today or never but if you are indeed serious about getting a home this is how to do it. Call me or some other realtor with a background in personal finance to get going.
Sincerly Benny Smith
It is very possible. However there is more that the lender looks at then just your credit scores (income, employment history, etc.). Also there are many programs available including special first time home buyer's financing. I recomend you speak with a mortgage lender and request a pre-aproval for a mortgage loan. The mortgage professional that I suggest you contact is Jim Franco owner of Welcome Home Finance 724-772-3333 ext. 2114. I have been helping people find homes here in Monroeville for 34 years and he is one of the best I have dealt with. Good luck and feel free to call me for further discussion.