Home Buying in Charlotte>Question Details

Brittney, Home Buyer in Charlotte, NC

Need a lender who can help with around 620 credit score

Asked by Brittney, Charlotte, NC Wed Jun 5, 2013

We are wanting to buy a house. My husband is self employed with around a 620 credit score and we have $5000 saved to put down. We need someone to help us get approved.

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Joel Lobb’s answer
Government-Backed Loans

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. Typically to get approved on A VA loan, you will need a 620 mid score with no bankruptcies or foreclosures in last 2 years with clean credit since BK or Foreclosures.

The better your score, the better your interest rate is likely to be. If your score is between 620 and 639—considered a risky score by some creditors—you could pay an interest rate of 5.718 percent on a $300,000, 30-year conventional mortgage. As of mid-August, 2010, If your score is at the high end, 760 to 850, your interest rate could be 4.129 percent on the same loan. A score of 650 may net you a rate of 5.172 percent.

USDA Home Loan Debt Ratio Waivers will be considered when the borrower has a middle credit score of 660 or higher, and the co-borrower has a credit score of at least 620.

If borrowers have credit scores of 659 or below, additional compensating factors will need to be documented for the USDA Home Loan Underwriters.
2 votes Thank Flag Link Thu Nov 21, 2013
You can get approved with a 600 credit score for home loan. I had a 580 credit score and got approved for an FHA loan just 3.5% down, The Lenders Network sent me to one of their lenders to get me approved so I would them first.

Good Luck!
6 votes Thank Flag Link Sat Aug 10, 2013
Depends if you want to have a tough borrowing experience now or wait 6-12 months and not be at the bottom of the borrowing barrel.

Credit scores below 640 are going to receive EXTRA underwriting attention, and everything else better be perfect.

Being self employed adds another layer of potential complication.

As Melissa Goss said, $5,000.00 is not much of a down payment. You've got to have cash reserves also. Even though $5,000.00 will get you a $142,000.00 house, unless you have other reserves for all the other expenses that will come up, buying now could be a self inflicted stressful situation.

You'd be better served by:
1- Getting both middle credit scores to 640.
2- Saving another $5,000.00- $8,000.00. Extra cash is a warm feeling.
0 votes Thank Flag Link Wed Jun 5, 2013
Some good answer here... a few things to add:

Be sure you have received your true credit score from all three bureaus prior to putting faith in the 620 score... Often times, score reporting websites and such report different figures than when a lender pulls your credit... The lender will pull all 3 bureaus and take the middle score of the 3.

Also, your credit score is a huge factor when lenders figure rates... If you are not in a hurry, it might be wise to work on increasing your credit scores, while still saving for the down-payment, so that you can obtain the best loan possible upon application.

The cost savings when paying a mortgage vs. rent is not worth it if you are stuck in a long-term high-interest loan that could have been better had a little work been done prior to the purchase.
0 votes Thank Flag Link Wed Jun 5, 2013
Good morning Brittany:
By asking your question the way you have you are most likely to get a lot of suggested "favorite" lenders. But some lenders specialize in large loans or loans for new homes, others offer loans for credit challenged borrowers or for homes in specific locations, some offer down payment matching grants or financing programs advantageous to first time buyers. There is also special financing available if you are buying a government owned home. What would likely serve you best would be to talk to a Realtor with expertise in financing about your specific financial profile, how long your husband has been self employed, how much you want your monthly payments to be and what type of a home you are wanting to purchase and the area. THEN select a lender that best provides for your financial needs and that fits the type of home you are considering purchasing. You want to have a lender pull your credit only after you are fairly certain that they will be able to approve you. Whatever you do, you definitely don't have more than 3 lenders pull credit. If you have a full time agent with a Masters degree in Planning with Finance and over two decades of experience, working for you, you will likely do better in negotiations. I'd be pleased to provide that service. If you appreciate this answer, please give it a thumbs up, or if this was the most helpful answer, please say thanks with a best answer click.
0 votes Thank Flag Link Wed Jun 5, 2013
As Dave mentions below, there are a lot of extra things to be prepared for when qualifying for a mortgage as a self-employed borrower.

You want to have your YTD P&L statement ready for the first half of 2013 in addition to your 2011 and 2012 taxes in order to determine your income and buying power.
0 votes Thank Flag Link Wed Jun 5, 2013

with a 620 credit score getting a mortgage lender to approve you is not going to be the issue. Most of them out there right now will go as low as 620 for approvals. the question is going to be how long has your husband been self employed and what does he claim for income.

If he does not have two years of self employment tax returns there is very limited things he can do right now to help him get approved for a loan. It seems that two years is the magic number becuase that way they can get some guage on how the business is performing.

Feel free to contact John Norton though at Georgia Bank.704-953-3571 though...he will tell you honestly what he can and cannot do.

Dave diCecco
Coldwell Banker United
0 votes Thank Flag Link Wed Jun 5, 2013
I can help you! send me an email jackieyoung@kw.com and I will send you a list of lenders who can help you get approved.

Jackie Young, Realtor/Broker
0 votes Thank Flag Link Wed Jun 5, 2013
Movement Mortgage- Justin Burris can likely help you. 919-535-4760
0 votes Thank Flag Link Wed Jun 5, 2013
Hi Brittney, I would be happy to refer you to my lender with Monarch Mortgage. You may be able to qualify for a HUD home with only $100 down. Shoot me an email or give me a call if you would like his information.

Kelly Sniatecki
0 votes Thank Flag Link Wed Jun 5, 2013
Donna Goforth with Summitt Funding at 704-806-1066

Bonnie Jackson with Wells Fargo Mortgage at 704-877-9166
0 votes Thank Flag Link Wed Jun 5, 2013
Call Craig Snyder with Coldwell Banker Mortgage. He can sometimes do scores as low as 600. His number is 704-280-6868.
0 votes Thank Flag Link Wed Jun 5, 2013
A lender may be willing to work with you, but with just $5,000 to put down, I would be leery to even start searching. You will need 3.5% down if you are going FHA that is the minimum down payment required, however to avoid adding a huge chunk of money to your monthly bill, you will WANT to put 20% down though to avoid adding PMI to your monthly bill.

The thing is, are you both working? It may be tough to get a loan if only 1 is employed with a credit score of 620.

Can it be done, sure.... how will you discover if it can be done though?

Walk into y our bank, and ask for the loan department. They will pre-approve you in a few minutes, or tell you what you must do to bump your score or better your chances of getting a loan for the next time you try
0 votes Thank Flag Link Wed Jun 5, 2013
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