Bunny, Home Buyer in 48038

With a 636 credit score and 3.5% downpayment can I buy a house? What other factors are lenders looking for?

Asked by Bunny, 48038 Mon Feb 1, 2010

Help the community by answering this question:


Good answer John!

A credit score alone does not qualify you for a mortgage, but more so any lender is going to look at the information behind the score as well. What I mean is that they're going to consider amount of debt/payments, the age of your credit, and the payment history in analyzing your creditworthiness. You'll probably need to have at least 3-4 tradelines with at least a 12 month history and relatively few if any late payments. If you have any non-medical collection accounts you'll probably need to pay them off.

In addition, they'll want to make sure that you have a stable job history and that your present debts combined with a prospective new house payment doesn't exceed more than about 40% of your income.

There are a lot of things that factor into being approved for a mortgage. And to be totally honest your credit score is towards the lower end, so I would definitely recommend you speak to a local, reputable lender who can assess your qualifications and help you develop a game plan. It's possible you could be approved right now, but you also may need to do a little work to shape up that credit.

I'd talk with someone soon though, because FHA will be changing their guidelines soon, and if your credit score is less than 620 you'll be required to put 10% down instead of the current 3.5%. If you're at a 636 now, then one small mis-step could hurt your chances.

Good luck Bunny and congratulations on your decision to explore homeownership!
1 vote Thank Flag Link Tue Feb 2, 2010

Just checking to see if you got all your answers regarding financing?

If you didn't please shoot me an email I'll get a lender to get with you personally.

If your in the market to by still, I can help you do that also. Again, just let me know.

God Bless,

Doug Beiswanger
Good Earth Real Estate LLC
0 votes Thank Flag Link Wed Feb 24, 2010
With the information you provided, it looks like a home purchase may be possible for you. However, there are many variables in the equation. Your best cvourse of action is to consult with a Mortgage Loan Officer who can review your entire financial picture and determine under what circumstances you would qualify for a mortgage. Good Luck.
0 votes Thank Flag Link Fri Feb 19, 2010
Hi Bunny,

With your credit score less-than-perfect you can probably qualify for a mortgage. A good mortgage with low interest rates are only available to those who have a higher credit score. You might want to consider improving your credit rating through a credit education credit repair program and then focus on purchasing a home. The higher your credit score the lower the interest rate! Good luck.

Hannah Fliegel
The Credit Repair Expert
0 votes Thank Flag Link Sat Feb 13, 2010
Hello Bunny!

My name is TJ Malkasian and I am a local mortgage banker/direct lender here in Grand Rapids, MI. I am currently able to finance FHA purchase loans down to a 580 middle score. However, with over a 620 score you will see a better interest rate on the loan. It seems like more times than not, my clients with a middle score of around 636 have a good payment history, good tradelines, and maybe a few small older collections still reporting. I am guessing that you will be eligible for FHA financing, but we would need to review your credit together to determine what, if anything, would need to be done to qualify.

One other loan program worth discussing with your credit score is the "Rural Development Program". This program requires over a 620 credit score and, in my opinion, is one of the best home financing option available at this time. WIth RD, you are able to finance 100% of the sales price. This means that you will not need to put down 3.5%. Many times my clients only pay for an appraisal out of pocket and can get into a new home. The other benefits of this program are: 1) there is no monthly mortgage insurance required 2) Rates are VERY good, similar to FHA pricing 3) You can finance cosmetic improvements into the loan! Many people arent aware of this feature.

The RD program is subject to geographic restrictions, so you can use this website as a tool to determine if a property you are looking at will be eligible for RD financing:


Why dont you get in touch with me and we can get you prequalified?

TJ Malkasian
0 votes Thank Flag Link Sat Feb 13, 2010
If 636 is your mid score should allow you be approved BASED on conditions

You need contact a mortgage broker be approved for a loan prior searching for a home, all sales offer must have lender qualification statement attached.

2 years employment
debt ratio to income
bank statements
recent pay stubs

0 votes Thank Flag Link Mon Feb 1, 2010
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