Home Buying in 52806>Question Details

alfonsopughjr, Home Buyer in Davenport, IA

My mid score of 611 and my income to debt ratio is around 15%. I heard there are ways to get FHA qualified with scores below a 620. Is this vaild?

Asked by alfonsopughjr, Davenport, IA Wed Apr 3, 2013

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The real problem in the scenario that you describe is your credit score... 611 is a little too low for any legitimate lender (that I know of) to offer you a home loan. Especially with an FHA loan.

There are several lenders that will grant you a loan with a credit score as low as 620. However, your interest rate will be somewhat higher than average, and the closing costs you incur will be somewhat higher as well.

A minimum credit score of 640 is the score you want to shoot for. And, if you can get it to 700 or so, you will have no trouble finding a lender. Especially with a debt to income ratio of only 15%.

The good news is that, with a little bit of work and due dilignece, you should be able to raise your credit score to a more acceptable level in as little as 3 to 6 months.

Just pay all of your bills on time, and in full (if possible) every month.

And, if you only need to establish a credit history, a pre-paid (you deposit monry into an account for future spending) Visa or Mastercard. Shop around with you rlocal banks to find one with low costs.

I hope this helps.
0 votes Thank Flag Link Wed Apr 3, 2013
A couple of thoughts for you. Before yu spend money on fixing your credit have an experienced loan officer look over the credit report.
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 didn’t happen or maybe should have fallen of the report months earlier.

Go to Your-Road-Home.com and read article #5A. Good information on credit and also you will find Consultation Interviewing Loan Officers and Consultation Interviewing Real Estate Agents will serve you well.

Also an article on FHA and FHA 203K.

Be sure to read about the MCC tax credit

Hopefully gathering this information will shorten your time line to owning your own home. After you gather all the information yu can find, and Trulia is a good source, you will also find that Trulia is a good source for loan officers and real estate agents offering their services in your area.

Best of Luck, Stephen
0 votes Thank Flag Link Wed Apr 3, 2013
The FHA 203K program is a really nice program!
Flag Wed Feb 26, 2014
Your debt to income ratio is low, which is good. I have a couple of excellent local mortgage loan officers who can help you repair your credit or can refer you out to someone. It may be a good idea to spend a little time and increase your credit, because your credit score will affect your interest rate and correspondingly how much you have to pay monthly. Email me at charlotte@melfosterco.com if you want me to refer you to a couple of mortgage loan officers. Best of luck! Charlotte
Flag Wed Feb 26, 2014
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