Home Buying in 33157>Question Details

Marlene Lamo…, Home Buyer in Miramar, FL

can you stil buy a home is your credit scores are low?

Asked by Marlene Lamora, Miramar, FL Thu Jul 14, 2011

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I agree with both what Beate and JoAnn stated. Your credit score obviously will be the determining factor whether you do or not qualify for a home loan. A FHA or VA loan is the best option for those that have a damaged credit history or less than perfect. While the minimum credits score have risen over the past 12 months, you can still get approved for a FHA loan it you have a 580+ credit score. While you will have a slightly higher interest rate with a 600 credit score versus a 680, the difference is minimal due current interest rate spreads. For example, a borrower with a 600 credit score is looking at a FHA loan with an interest rate of 4.5%while a borrower with a 700 credit score is looking at 4.25% at today's market rates.

The one question I would ask you...and one I ask all my clients. Do you think you financially are ready to own a home? Not only do you have to make a mortgage payment monthly but you also have to be ready to handle any household repairs which can be rather expensive.

In any case, I wish you the best of luck and hope you are able to achieve your goal of owning a home in the near future.
Web Reference: http://www.merrittnoel.com
0 votes Thank Flag Link Thu Jul 14, 2011
If you have money to put down, yes. If not, no. Lower scores require higher down payment. For FHA loans, you need at least a 620 credit score to have a good chance in closing. Although lenders will go as low as 580 and 500 in some instances, as JoAnn stated, your fees and rates are much higher. The other problem is that you'll go through so much stress waiting for a decision that may not be favorable. I won't discuss going conventional if you tell me your credit is bad, but just know you need at least a 660 score for that program. As Beate mentioned, along with the score, you need a good credit profile: 3 credit lines over 1 year old each paid on time for the last 12 months. No open collections less than 24 months ago. Medical collections okay to leave open. Go to annualcreditreport.com and get a copy of your credit report. Look at it and see if you would lend money to yourself. If not, then contact crednology.com and have them help fix your credit. They are approved by the Federal Trade Commission.
0 votes Thank Flag Link Thu Jul 14, 2011
Hello Marlene,

how low is "low"? Your credit score is not the only factor that determines whether you qualify for a home loan. I am located in Pembroke Pines and could meet with you if you like, to go over the loan approval process with you and answer all your questions.

Please feel free to contact me at your earliest convenience.

Best Regards,
Beate Rodriguez
Lic. Loan Originator
0 votes Thank Flag Link Thu Jul 14, 2011
Depends on the situation but with lower credit scores comes higher interest rates. It may be a better idea to pull your credit and work on the items that are bringing your scores down first. A little patience and a few months could save you thousands of $$$ in finance charges! Not to mention you wouldn't have to sweat wondering-waiting on final approval of your home loan and if the loan isn't funded hundreds of dollars in inspection costs if the loan does not go through. I hope this helped...GOOD LUCK and I wish you all the BEST!
JoAnn Thaxton, Broker/Realtor
Remax By The Water
0 votes Thank Flag Link Thu Jul 14, 2011
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