Hi Dad 101 ~

Your FICO score is too low but the good news is ... with a little work, there are things you can do to increase it. The first step is have a mortgage professional run your credit to see what is causing the low score ... negative items being reported, maxed out credit cards or perhaps a lack of trade line etc. You don't need to pay hundreds of dollars to a credit repair company. Save your money! Its true that 640 is the target for an FHA loan.

To Your Success,

Barbara

Wow... good for you 10 years on the job and money saved! However, work on your credit rating for now by getting it up..to 620 or over. You'll be glad you did! Then go shopping for a home!

620 mid score FHA but 640 is rumored to be coming. No lenders or mortgage insurance companies besides FHA lending under 700 mid score

Brian Frank
Lyon Real Estate
916-402-4697

Jeff,

Is it that tight now? Heavens. What if the borrow has a really good "story" about why the score is so low?

Currently a 620 minimum fico is required from the vast majority of lenders (and I'm not personally aware of any that are still doing 580 scores).....and to make life a little more difficult some lenders are requiring a 640 score (which took effect Nov 13th)......

BTW - when we pull your credit history, we use the middle fico as your identifying score. Do you happen to know your other 2 scores?

As you can see you've got some work to do to get your scores to a level acceptable to a lender. Though I do have private lenders at my disposal, you won't be the least bit interested in their terms...

Feel free to contact me if you'd like a more detailed analysis of your situation!

best, Jeff Marr
Stanford Mortgage
916-947-1312

29% of your income equates to a maximum of $1330 per month considered as the top ratio in calculating an FHA loan. That figure will be lower if your car payment, visa payment and other loans cost more than $550 per month.

With $15,000 down and payments of $1330, the maximum you could qualify for on an FHA loan is probably about $205,000. If you put $10,000 down that puts you into the $215,000 price range at the high end.
There are hundreds of nice homes at or under that price in Sacramento.

That leaves you with $5,000 in reserves which is nice to have when you move into a house.
There are many first time buyer programs, and median income buyer programs to help out, such as the Federal tax credit, which has been extended out to next spring.

I am a Realtor, and no longer write FHA loans myself; there are some great loan officers on this website, I expect some will volunteer with more detail on the FHA and other loans available.