Home Buying in Reynolds>Question Details

SP29, Home Buyer in Reynolds, GA

I have credit scores of 565, 605, 555 can i get a home loan?

Asked by SP29, Reynolds, GA Sun Nov 6, 2011

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I think you can get approved with a 580 with the right lender, but do not go lender to lender, find a broker or service that helps you find a lender. I have had clients get approved by The Lenders Network when they had under 600 scores so I would try them out first.
2 votes Thank Flag Link Sun Jul 14, 2013
Hi my name is freeman my question is that my middle score is 565 and trans union is 693 with that saying I'm trying to buy my sibling out of my mother's home which I have lived in with her for 4 years and just this February she passed. Could I be helped in getting a homeowner loan to pay them off the house is appraise At 62000 in east chicago Indiana.
0 votes Thank Flag Link Tue Oct 14, 2014
Acceptable Scores
The score your lender will accept for a conventional loan can be determined by many factors, including your payment history, your salary history, your current wage, your available credit, the scores other lenders are accepting and the current economic climate. Cornett Communications advises that even in tight economic times, a score of at least 640 will get you in the door for financing.
Fannie Mae
Fannie Mae is one of two government-backed mortgage lending houses; Freddie Mac is he other. Independent lenders take many of their cues from what these two organizations do. According to the "Washington Post," Fannie Mae raised its minimum credit score for conventional loans in 2009 from 580 to 620. Even if you have a 20-percent down payment, you can be rejected if your score is below 620. Fannie Mae will also reject a loan if more than 45 percent of your income goes toward paying debt.
Government-Backed Loans
Home loans backed or financed by the Federal Housing Administration and the Veterans Administration have different views of credit scores. FHA recently changed its minimum credit score to 580, which qualifies you for lending programs that require only a 3.5 percent down payment. VA loans are 100-percent financed and set aside for active and retired military, along with their families. There is no minimum credit score to qualify, though a better credit score will get you a better interest rate.
0 votes Thank Flag Link Sun Jun 30, 2013
Credit scores are probabilities; your scores indicate a low probability of the lender being repaid in a timely manner. Looking at it from your side, they represent a high probability of bigger problems down the road. Buying a home simply increases your odds of having even larger problems unless the reason your scores are where they are because of a single traumatic event that is likely not to happen again. That profile would show a long payment history of very good payment histories, then a big crash, payments on time again after the crash. If that doesn’t describe your credit history then don’t try to work around the system, it is there to protect you more than it does the lender.
0 votes Thank Flag Link Mon Nov 7, 2011
With a 565 middle credit score, you are not going to meet the minimum credit score requirement for today's market. Since October 2010, the general industry minimum credit score for an FHA mortgage has been 640+. Prospect Mortgage does however offer a 580-639 FICO FHA option with a 3.5% down payment.

In early October 2010, HUD imposed a 580+ minimum credit score for FHA mortgages with 3.5% down. While HUD technically will allow down to a 500 FICO with at leeast 10% down, I am not aware of any lenders actually originating and closing loans with that profile. Generally, someone with less than a 580 credit score will not meet the credit profile that is required today.

Your best option is to get a copy of your credit report and begin work on paying off your outstanding debt while not being late in the future.
Web Reference: http://www.rodneymason.com
0 votes Thank Flag Link Mon Nov 7, 2011
We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website. http://www.consumer-action.org

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE. http://www.ftc.gov

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140
0 votes Thank Flag Link Mon Nov 7, 2011
Only a lender who has looked at your complete file can say yes or no, but you will likely have a hard time. Generally most lenders will use the middle score to determine rates & programs. Right now there are few that are going as low as 565.
Your options are to wait for your credit to improve or take some action to help it improve faster. The most common steps to improve your credit score are to pay down you existing accounts to 1/3 their limits, dispute any derogatory information you can disprove and pay your bills on time. You can do these things yourself for very little cost or you can find a reliable credit repair company to help for a fee.
0 votes Thank Flag Link Sun Nov 6, 2011
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