Home Buying in Caledonia>Question Details

1076069, Home Buyer in Caledonia, WI

Home loan for first time home buyer with low credit score

Asked by 1076069, Caledonia, WI Tue Oct 2, 2012

Can you get a home loan with a credit score of less than 600 in wisconsin? If so names of lenders please.

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For lower credit scores, it might be a good idea to check with a mortgage broker. They often have more programs and mortgage companies available to them. A company I have sent my buyers to is linked below.
2 votes Thank Flag Link Tue Oct 9, 2012
IF SOMEONE HAS A CREDIT SCORE AT 629 AND IS NOT WORKING BUT GOING TO SCHOOL COULD THEY GET A LOAN TO PURCHASE A HOME IF PARENTS HELPED HER TO PAY IT UNTIL SHE FINISHES SCHOOL. PARENT'S CANNOT GET LOAN OUT BECAUSE THEY ARE ON DISABILITY CREDIT SCORES ARE BELOW THE 600 MARK
0 votes Thank Flag Link Tue Apr 9, 2013
In today's lending environment, I doubt it. The vast majority of loans are packaged for sale to the secondary market, and therefore the mortgage guidelines for Freddie Mac, Fannie Mae and FHA stand supreme. I don't know of any "subprime" lenders that survived the mortgage apocalypse of the past few years; SunTrust was pulling back pre-approvals in 2007 for any borrowers who had less than 620 credit. They were about as generous as it got. Bank of America has been brutally punished for absorbing Countrywide Financial, another subprime lender. Lawsuits are still flying. Subprime mortgages are all but extinct.

That's not to say it's hopeless. If you have good income, and a good down payment, you might find a local bank or credit union who will consider you for a balloon mortgage. (eek!) This is not for the faint of heart. But by using an in-house mortgage with a local bank, you can get into a home, make payments for 1 to 5 years depending on the term of the balloon note, and then refinance into a more traditional mortgage.

Otherwise, you could try for seller financing; this is also a temporary type of mortgage. The pitfall here is most private sellers are NOT going to report you good payment history to the credit bureau, so after 1 to 5 years of making payments, if you can't refinance - poof! Your land contract is up, and there you are, owning the seller the remaining balance in a lump sum and no way to pay it.

If all else, put your energies and money behind improving your credit score. I know it's tempting to want a house NOW while prices are low - but if you end up getting into a bad financing deal out of desperation, you're not going to get ahead. I've got a couple of blog posts on Trulia that might help you. Best of luck!
0 votes Thank Flag Link Mon Oct 22, 2012
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