Home Buying in 07071>Question Details

Gallegni, Home Buyer in 07071

is it best to wait and have 20% down before buying in this market? mostly if your score is barely 620

Asked by Gallegni, 07071 Sun Feb 6, 2011

looking in lyndhurst nj

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14
Jeff Belonger’s answer
Gallegni,

With some of the answers below, be careful of who tells you that the higher the scores the better. That is an unknown until you know what credit scores. I have written many posts on the fact even with 10% down and credit scores of 699, that FHA is cheaper.

@ Marcus.. the question was about 20%... as loan officers, we need to go over all scenarios and explain different scenarios... it's easy to say FHA allows for 3.5% down. But in my opinion, you need to show different variations. Just my opinion.

thanks,
jeff
1 vote Thank Flag Link Sun Feb 6, 2011
Depends. Best to go directly to a local pro at "Find a Pro" in the header of this website for local advice.
http://www.naplesrealestateguys.com/ or a local Mortgage Broker at "Find a Pro" in the header of this website. http://www.naplesrealestateguys.com/
0 votes Thank Flag Link Thu Nov 22, 2012
Yes, no and maybe.......why is your score barely 620? What area of the country? What does your employment future look like. Yes, there are lenders who will go down to 620 (and some lower); however, the pricing add ons will affect the payment. Personally, I recommend you meet with a "counselor" not a "loan officer"....many of us are both...but strictly speaking a "loan officer" is looking to close loans...not counsel for your best interests.
0 votes Thank Flag Link Thu Feb 24, 2011
Hey it depends on what your looking to buy and what you qualify for. You may qualify for fha and be able to put 3.5% down, of course your monthly payments may be higher. If you need help looking for a house in lyndhurst you can give me a call. I live in lyndhurst and know the area fairly well. i work out of the Kearny office 2 towns away. My contact info is 201-463-9758 or email is SLartiga@gmail.com. Look forward to hearing from you.


Steven Lartiga
Rosa Agency Realtors
551 Kearny Avenue
Kearny Nj 07032
0 votes Thank Flag Link Mon Feb 7, 2011
Hi, it looks like you need some help on how to buy a home, i can give you some
ideas, please call me and we can get started,
anthony
Palisades Real Estate of Fort Lee
2069 Fletcher Avenue
Fort Lee, Fort Lee, NJ 07024
201-832-2087 cell
office 201-944-6361
0 votes Thank Flag Link Mon Feb 7, 2011
Gallegni,

You need to check all options with several reputable mortgage brokers/lenders. Jeff made some very good suggestions and comments.

Just FYI, Wells Fargo is offering FHA loans to people with lower scores. Simple synopsis is:

Borrowers with credit scores 500-579 need a 10% downpayment (their cash) and the downpayment may NOT be a gift or be part of a downpayment assistance program.

Borrowers with credit scores 580-599 but 5% downpayment is required (their cash), and the downpayment may NOT be a gift or be part of a downpayment assistance program.

Borrowers with a credit score of 600 or higher are required to have a 3.5 percent down payment, and a gift is acceptable.

For all borrowers, seller concessions are limited to 3 percent.

Might be worth talking to someone at Wells also to see what your options are, and how it will fit into your budget.
0 votes Thank Flag Link Mon Feb 7, 2011
@Jeff thank you for your opinion, I notice that this question will need a little more information before I advise Gallegni anything set in stone. Once again Gallegni feel free to call me on monday with your question and I will be happy to assist you. Have a great day!
0 votes Thank Flag Link Sun Feb 6, 2011
@Jeff thank you for your opinion, I notice that this question will need a little more information before I advise Gallegni anything set in stone. Once again Gallegni feel free to call me on monday with your question and I will be happy to assist you. Have a great day!
0 votes Thank Flag Link Sun Feb 6, 2011
Your best bet is to talk to a reputable mortgage broker. My understanding is that for a conventional mortgage lenders are looking as high as 710 or 720 for a credit score. I've also heard 660 as a marker even for an FHA loan. The greater the down payment, as you indicate the 20%, is definitely helpful. I've heard that there is also an issue sometimes with buyers having difficulty qualifiying for the PMI if they have less than the 20%. If you are more comfortable seeking amortgage name or companyn from someone other than an agent, you can also speak to a real estate attorney who are familiar with mortgage representatives.

I'm happy to assist you in your home search or help you anyway i can.
Don't give up!
Wendy
0 votes Thank Flag Link Sun Feb 6, 2011
Gallegni, there is a program called fha where you can put down as little as 3.5%. Feel free to call me @ 908 448 9825 and I can give you full details. And answer some of the other question you may have. Happy super bowl sunday!
0 votes Thank Flag Link Sun Feb 6, 2011
The concern might really be more about the credit score than the down payment. The lower score will create a bigger cost for you to borrow money. But, one must counter that with the possibility of an overall increase in interest rates.

There are a lot of "ifs" to consider.

If your income will remain stable or increase,
If your job is stable, and continued employment is highly likely,
If the cause of any credit bruises has passed,

these are indicators that you may be ready to purchase soon.

If there is a possibility of your credit score raising in 60-90 days, it may be worth it to work on that. How long will it take you to save 20%? If its a long time, the increase in interest rates may make it a better choice to purchase with 5% or 10% down.

The advice you receive from a competent mortgage professional can be invaluable. A frank discussion and review of your income, assets and credit is needed to provide you meaningful advice on this matter.

My response is, "It depends." Although I tried to additionally provide you a few considerations that would guide decisions.

Good Luck.

Deb
0 votes Thank Flag Link Sun Feb 6, 2011
Deborah Madey, Real Estate Pro in Brick, NJ
MVP'08
Contact
PS.. you can still do a conventional loan with a mid score of 620... many lenders on FHA loans won't go below 640.. we will go to 620.. I highly advise not using a mortgage company that goes below 620 because the rates are very very expensive. Better to deal with an expert that can help you get your scores above 620.

thanks,
jeff
0 votes Thank Flag Link Sun Feb 6, 2011
Gallegni,

It really depends on the cash you and have and what you want left over. Even with 20% down on a conventional loan,it will cost you 3 pts more than it would on a FHA loan.Yes, you won't have mortgage insurance on a conventional loan, you will have mortgage insurance even with 20% down on a FHA loan. In my opinion and after doing scenarios, mostly depending on your goals, it still would be better for you to go with a FHA loan even with 20% down... but it again, it comes down to have much cash you have. I truly believe that cash is king and that you should keep more of it in your pocket. I have written several articles showing you differences and I advise you to read these.

http://www.fhaloansfhamortgages.com/2010/10/31/dont-need-cre…

http://www.fhaloansfhamortgages.com/2011/01/15/fha-loans-vs-…

http://www.fhaloansfhamortgages.com/2011/02/02/fha-loans-vs-…

http://www.fhaloansfhamortgages.com/2011/01/06/how-much-of-m…


Thanks,
jeff
e-mail : jbelonger@ihmci.com or cell : 609-440-5133
0 votes Thank Flag Link Sun Feb 6, 2011
Since your credit score is "barely" 620, as you put it, you will most likely be getting an FHA loan, assuming you are going to buy a home that is less then $729,750.

With an FHA loan, you can put down as little as 3.5%, but keep in mind that the less you put down the higher your monthly payment will be.
0 votes Thank Flag Link Sun Feb 6, 2011
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