By Stephen Webber Retired After 34 Years of Real Estate For First Time Home Buyers
Most importantly donâ€™t do anything until your loan officer looks it over with you. So many times people do what would seem like a good idea; pay off a past due or pay off a credit card and close the account to later discover they actually lowered their rating.
Loan officers work with credit continually and many times can suggest a notification or two and presto the rating is up. Maybe there is a late pay that didnâ€™t happen or maybe should have fallen of the report months earlier.
They have a very strong incentive. They canâ€™t make a loan unless the credit is acceptable so the experienced loan officers know their stuff.
An article that will serve you well is '#13 Consultation Interviewing Loan Officers' at Your Road Home.com. Also article #5 Your Credit and Financing Your Home.
Choose your loan officer before you allow anyone to fix or monitor your credit. Your loan type will dictate the required rating. Once you know exactly what needs to happen you can direct the requirements, establish a time line and plan your next step.
The shortest path to owning your home.
Donâ€™t let anything or anyone deter you from your goal of owning your home.
Best of Luck, Stephen Webber Retired After 34 Years of Real Estate For First Time Home Buyers
What everyone wrote is correct; a 740 (760 on Jumbo) is the score that will get you the best terms on conventional financing. FHA itâ€™s 640 or 680 depending on the investor, and there is not usually an advantage for higher scores as far as rates go.
The one thing I didnâ€™t see mentioned it he issue of depth. It is possible to have a mid-700s credit score with only one 6-month old account. Most conventional lenders will require that there be three lines of credit that are 12 months old or more. Also, having a disputed account can cause issues regardless of the score because most investors will consider that the score is not reliable because the disputed account may not be considered.
To clarify the previous 4 answers:
1. The middle of the tri-merge report (Transunion, Equifax, and Experion) credit score of the weakest buyer will be the score used to qualify.
2. You can get a conforming loan with a credit score as low as 620, but at much higher interest rate and with mortgage insurance through FHA if you are going to live in the home.
3. If you are going to live in the home, you can get a conforming loan at up to 97% loan to value.
4. Conforming loans are up to $625,000 unless with FHA where you can go to $729,000 with the higher credit scores or really good excuses for lower credit scores.
5. Jumbo loans are above the amounts described in the previous paragraphs, any you will need AT LEAST 20% down with credit scores above 740 and 30% down with credit scores above 700 and 40% down with credit scores above 680. (These are rough guidelines, not absolutes.)
Hope this helps. You can reach me off line to discuss your particular loan prospects by calling me at 408-639-0211 or writing me at firstname.lastname@example.org. I hope you find and buy the home that fits your dreams and your needs.
Mitchell Pearce, realtor and mortgage loan officer
At your service,
Certified Distressed Property Expert
Conforming, greater than 80LTV need 660+
if credit score is below 680 then max DTI is 41% not 45%
740 has no restrictions.
600 i think is lowest for FHA
Non-conf,700-720 is good.
changes for cash out or investment prop.
10 point score exception is possible.
If you need more information call me at 408-316-0793 or email me at email@example.com
Thanks for giving us an opportunity to answer your question. Well, as you might already know, you can buy a home with credit score below 700. However, the higher score you have, the lower DTI (debt-to-income) ratio, the lower rate and easy to qualify you will get.
If you need to get pre-approval letter prior to start looking for house, please give me a call at 408-426-1441 and I will hook you up with lender and get you pre-approval letter at no cost to you. Also, FYI, I do not do loan, but people I do business with can and will get you lowest cost at close escrow, guaranteed!
1-STOP Realty Group
900 E. Hamilton Ave.#100
Campbell, CA 95008
Bill McCord gave you an excellent answer.
Essentially the higher your credit score, the better your chances for getting financing in this very restrictive lending environment.
There are programs available for people with lower credit scores than 720, buy they are more difficult to get financing, and you need to be working with a very good, experienced loan officer if you are to be successful..
Charles Butterfield MBA
Real Estate Broker/REALTOR
Cell Phone: (4080509-6218
Email Address: firstname.lastname@example.org