Home Buying in Atlanta>Question Details

yvonnemobley, Home Buyer in New York, NY

trying to buy a home ,credit in the high 500s is this possible?

Asked by yvonnemobley, New York, NY Wed Feb 13, 2013

This question was asked from this property: http://www.trulia.com/property/3083418137-3714-Lake-Enclave-…

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Debra (Debbie) Rose’s answer
Yvonne - please...........just be careful - if something sounds too good to be true - it most likely isn't true ( for exampkle - no credit check and a rate of 3%? really? if I were you, I'd run in the opposite direction!). I wouldn't take financial advice from anyone who claims they "wanna" help you
4 votes Thank Flag Link Sun Feb 17, 2013
Thanks for the great advise!
Flag Tue Feb 19, 2013
For an FHA mortgage, most lenders require a 640+ credit score for the last 2-3 years now.

Prospect Mortgage is one of the few direct lenders to offer an FHA 580-639 FICO loan program. Credit profile is a major factor in a mortgage approval. Generally, there should be no late payments, new collections accounts/charge-offs/liens/judgments in the last 12 months. It is required that all open collection accounts must be paid in full if their cumulative balances exceed $1,000.

The 3.5% minimum down payment can be from the borrowers own funds or it can be gifted from a family member. Two months of reserves for the PITI (Principal + Interest + Taxes + Insurance) payment + HOA Dues will be required. This must be from the borrower’s own funds and not a gift.

Working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
3 votes Thank Flag Link Wed Feb 13, 2013
Thumbs up to Debbie for that advice! I have an excellent credit score and my rate was 3.625% on a traditional loan. FHA loans are usually a little less, but from my understanding you would need a score of about 640.

My suggestion if you're determined to apply for a loan now is to find a mortgage broker. Ask around for recommendations and remember, you can look for pre-approval with multiple brokers/banks. I had a few going during the home buying process.
2 votes Thank Flag Link Mon Feb 18, 2013
Flag Thu Feb 21, 2013
I'm not an agent, but I was where you are today. I decided to hold off on purchasing a home until I had my financial ducks in a row. It took several years, which seems like forever, but it was worth the effort.

First I obtained my credit reports and looked them over for inaccuracies. The reports are free once per year so take advantage!

I took note of the negative marks on my reports. Anything that is in default and has been paid/forgiven falls off of your report in about 7 years. If it is unpaid and in collections, take care of it as soon as possible. I called companies and negotiated payment plans. Another tip is to try paying off your smallest debts first, working up to the largest, without defaulting.

If you need to, then work with a debt consolidation company. I was able to avoid this, but I spent a lot of time of the phone in negotiations and not everyone is up for that task.

I canceled all but two of my credit cards. Remember, the more credit you have available, the more potential debt and that can lower your score. I used my credit cards, but paid them off in full each month to build up good credit without debt.

The process took me years to complete, but my now excellent credit score enabled me to obtain a loan without any issue and get a fantastic interest rate. It was all worth the effort.
2 votes Thank Flag Link Sat Feb 16, 2013
Thanks for sharing your story
Flag Tue Feb 19, 2013
The only way to get a mortgage with a 500-579 credit would be with a hard money lender. Those will come with a large down payment requirement and a high interest rate.

No traditional mortgage programs are going to go that low on a credit score. HUD is the most aggressive and that is only on FHA. HUD has set their minimum credit score for an FHA mortgage at 580+ with a 3.5% minimum down payment.

While HUD does technically allow down to a 500 credit score with at least 10% down, I am not aware of any mortgage companies actually offering that program. Buyers with that low of a credit score are almost always going to have recent late payments. If they didn't, then their credit score would not be that low. It's all about risk of default and that risk increases greatly the lower the credit score goes. F their is a lender actually doing an FHA under 580, they are going to have so many restrictions that no typical buyer is ever going to actually meet the criteria for it to actually close.
1 vote Thank Flag Link Tue Feb 19, 2013
Thanks this info is very helpful..
Flag Tue Feb 19, 2013
Please do not be in hurry to purchase with that low score. You will pay a very high interest rate. Get in touch with a HUD housing counselor who can help you get your score up. The service is free. You will be glad you worked with a counselor and you will enjoy the home and the payments better.
1 vote Thank Flag Link Wed Feb 13, 2013
Hello Yvonne,

I have lenders that can get you finance in the 500's. I'm the market expert in assisting you with your home purchase in South Fulton/Camp Creek. I would the oppurtunity to help you purchase your dream home.

Cheryl Taylor
1 vote Thank Flag Link Wed Feb 13, 2013
Do you need a legitimate loan of any kind, contact my company via email:elitefinance53@yahoo.com.hk
0 votes Thank Flag Link Sat Feb 23, 2013
Maybe, Because multifamily properties are unique, and residential realtors aren’t usually savvy when it comes to the inherent intricacies of an apartment complex.
0 votes Thank Flag Link Thu Feb 21, 2013
Yvonne, as I stated, you can buy a home with a low 500 credit score, as a matter of fact with a 500 credit score. If you are not working with a Realtor I will be happy to assist you, I am waiting for your call.
0 votes Thank Flag Link Sun Feb 17, 2013
Hi Yvonne,

Unfortunately, most lenders are weary to work with buyers who have credit scores less than 620. However, please don't be discouraged as there is always someone out there willing to help you procure your home! I have a great business relationship with a lender who works with buyers with credit scores as low as 580. I see from your question that your score is in the high 500's; if that's the case, I strongly believe I'll be able to make your dream into a reality. Please feel free to contact me (my direct information is below), and let's see if I can be of assistance in your search!

Best regards,
Adrian Archuleta
(404) 494-6986 (cell)
(770) 964-3125 (work)
0 votes Thank Flag Link Sat Feb 16, 2013
good advice from the previous poster!

get your financial ducks in order first..then look into buying a home.

The only suggestion I would make is... do not close out credit cards - your score can/may go down if you do that.

It is better to keep those lines of credit open and just NOT just them - it shows you know how to manage your finances, and not use up credit just because you have it available. If you have a high percentage (and you can't get higher than 100%!) of unused credit, that will help your scores increase.

Now, if you don't trust yourself to let that credit card sit, unused, then that's another story!
0 votes Thank Flag Link Sat Feb 16, 2013
Please see Rodney's answer below. I have yet to see a financed buyer with a credit score of 500 and I would be weary of any who say they can. Typically you will find that it is really a lease purchase or rent to own deal with high interest rates and high non refundable deposits.
0 votes Thank Flag Link Sat Feb 16, 2013
look for contract for deed from owner and have attorney do paper work. offer little or no money down
0 votes Thank Flag Link Thu Feb 14, 2013
You can buy a house with a 500 score Yvonne. If you are not working with a Realtor, I will be happy to represent you. Please give me a call at 678-492-6026
0 votes Thank Flag Link Thu Feb 14, 2013
I can help with credit scores as low as 580. Give me a call or feel free to apply online at http://www.rhlapps.com/kjones

K.C. Jones
RH Lending
0 votes Thank Flag Link Wed Feb 13, 2013
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