Home Buying in Erie>Question Details

Autumn, Home Buyer in Erie, PA

How can I get a mortgage when my credit score is 581 but my debt to income ratio is below 20%.?

Asked by Autumn, Erie, PA Tue Jul 7, 2009

I AM WORKING AND GROSS AROUND 20000 A YEAR.

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Are you a Veteran? Have you spoken with a loan officer about an FHA loan? If I can refer someone to you, please let me know!
0 votes Thank Flag Link Tue Jul 7, 2009
Buying a home isn't getting into debt when you consider you have to pay a monthly payment wherever you live, buying or renting. Buying a home is an investment... You can purchase with a 581 credit score as long as you do not have a lot off bad debt, and have shown some positive payment history.. you will need a 580 credit score and 3.5% down for FHA loans with the Lenders I know that have helped my clients.. If you would me to refer you to a Lender please email me or visit our website..

https://thelendersnetwork.com/fha-guidelines/
6 votes Thank Flag Link Tue Sep 24, 2013
Try to fix your credit score and focus less on getting in debt and instead focus on staying out of it. Once you take the steps to get out of debt and get your credit score higher, I think you will still find good bargains (homes) on the market. Save 20% to place as a down payment and live relatively debt free or at least within your means. That is advice I would give a friend. Hope that helps.
2 votes Thank Flag Link Tue Jul 7, 2009
Yes, your score of 581 should work! The lowest credit scores lenders like myself are able to do, is a score of 580. Since your scores are above 580, then you should have a chance when it comes to credit. Also there are other financial factors that would need to be analyzed include your income, expenses, assets, liabilities, debt, employment, down payment, as well as credit scores. If all of these factors are in place then you should be good to go. The best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!

Brian Nguyen
Sr. Mortgage Banker
NMLS # 659743
Phone: 949.667.2887
brian.nguyen@nafinc.com
0 votes Thank Flag Link Thu May 8, 2014
We offer a variety of programs, it sounds like you would best fit the FHA program with a minimum of 3.5% down. If you haven't be able to get pre-approved anywhere yet, please feel free to contact us any time, the pre-approval is 100% free of charge!
0 votes Thank Flag Link Tue Sep 24, 2013
FHA really isn't credit score driven, it's the Banks and Lenders that set those score requirements. There are a few lenders that go down to 580 with FHA, I personally have closed on several homes with clients around and under 600. I recommend all my clients that have credit issues to check with The Lenders Network, check them out. If anyone can get you approved they can!
0 votes Thank Flag Link Tue Jul 16, 2013
Dear Autumn,

You might be able to 'qualify' for a loan with a low credit score of 581 but you are going to pay high interest rates for that money. Why not set yourself up for success long term. If you begin with credit repair in order to work to remove any late pays, slow pays, negative items on your credit reports you will get a better overall credit rating. Then I can work with you to provide some credit score boosting strategies so that when you go back to your favorite mortgage broker, you will not only 'qualify' for mortgage but you will qualify for a good mortgage with a very low interest rate. Imagine how much easier life would be with better credit? The process takes 4-6 months which is enough time for you to impliment good saving and spending habits and the fee is very reasonable a flat fee of $399.00 (with a money back policy). Good luck!
0 votes Thank Flag Link Wed Jul 8, 2009
If you are a first time buyer Pennsylvania Housing Finance Agency (PHFA) should work. They work with FHA, VA and Conventional loans. The PHFA / FHA has no minimum credit score. Many local lenders work with PHFA.
0 votes Thank Flag Link Wed Jul 8, 2009
Find a broker that works with First Guarantee Mortgage or contact the Account Executive below and ask her which broker in the area works with her. This will be an FHA loan. You will need to write letters of explanation as to why your score is low. The mid score can go down to 580 for 3.5% down and down to 530 with 25% down.

Katie McLeod

Account Executive

First Guaranty Mortgage Corporation

301 682 8228 x225 Office



888.295.7899 Toll Free
0 votes Thank Flag Link Tue Jul 7, 2009
Autumn,

I wish I had great news for you and say that it's no problem, we'll find someone to make the loan, but it's not that easy and I would never mislead anyone into thinking it was.

Lenders will take the middle score between all 3 reporting agencies and use that score to determine if you qualify or not. If your score is that, I offer a few sugestions to bring it up as I have been told several times that a score of 680 is needed here in NC.

A lender will give you the best advise on how to raise your score and maybe have some programs to help you, but first and foremost, start by ensuring you pay all your debit on time. If it's past bills that;s bringing you down, contact the agencies and see if you can negotiate a pay plan that will work in your budget. If it's lack of credit that's hurting you start establishing a good record by enrolling in a prepaid credit card and use it once a month to purchase $10.00 in gas or some other small item, pay it completely when the bill comes in and do it again. Bank of America has a great card for that and only requires $300 to get the card going. Once you start getting a positive credit flow you'll be on your way to owning your own home, but please, contact a lender and see what they say as well

Daniele Summerfeld
Wilkinson & Associates
0 votes Thank Flag Link Tue Jul 7, 2009
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