Credit Score in Birmingham>Question Details

donaljack2010, Home Buyer in 35150

Birmingham, Al. area...What are my chances of getting a mortgage w/credit score of 605, with 100% financing & assistance for closing cost?

Asked by donaljack2010, 35150 Fri Sep 13, 2013

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5
Rodney Mason’s answer
To begin improving your credit score, you would need to contact each of your creditors directly to see what your options are. Paying off derogatory debt will help improve your credit score in the long run, but not immediately.

With collection accounts, most of the damage is done when they are initially placed on your credit report. Some collection companies are now reporting you are late each month the debt goes unpaid. This continues to drag on many people’s credit scores each month until the debt is paid in full. Until you do that, your credit score has little chance of improving.

In exchange for paying the collection account in full, you can try to negotiate to have them completely remove the derogatory item once the payment is received. Some collection agencies will do this, while others will not. You will just have to ask each one and see. If they will not remove it, just having it paid and closed will help in the long run.

All liens and judgments will also need to be paid in full. These impact the title position of a mortgage so they must be satisfied.

It is very important that you be VERY careful in disputing accounts. You cannot dispute accounts which you know to be accurate. For a mortgage, you cannot have an active and open account that has a disputed status. Fannie Mae/Freddie Mac/HUD all have very specific guidelines to be followed when a borrower has an account in a disputed status. In some cases, it could cause you not to be able to qualify.

To build positive credit, you typically need to have 2-3 trade lines reporting for 12-24 months. There should be no late payments or other derogatory items reported in the last 12-24 months. On your Revolving credit accounts, your outstanding balance on your monthly statement should not exceed 30% of the credit limit.
1 vote Thank Flag Link Mon Sep 16, 2013
BEST ANSWER
For 100% finanancing your best bet would be a USDA RURAL loan, which would me area's on the outskirts of Birmingham. You would really need to speak to an agent who could then recomend a good lender to you in order to see what programs may be available for your situation.
Another thing to consider is working with the lender to figure out what is bringing your score down and to correct it, get your score up and become elgible for a lot of other types of loans that may be helpful. 100% is going ot be tough. Most times we can get sellers to agree to pay some or all of closing costs, again that is where having a good buyers agent representing you comes in handy.

If you'd like a referal to a lender that I think can help you and can try to get you pointed in the right way as far as building your credit up some, please let me know.

Best of luck!

Aaron Sims
2 votes Thank Flag Link Sat Sep 14, 2013
Please refer me to a lender you think might be able to help........Thanked
Flag Sat Sep 14, 2013
With a credit score that low, you would not meet the minimum credit score for 100% financing at this time. Only VA (for eligible Veterans) and USDA (for Rural properties) currently offer 100% financing. VA will require at least a 620+ credit score. Earlier this year, USDA raised their minimum credit score to 640+ and in some cases, to 680+.

For an FHA mortgage, most lenders require a 640+ credit score since 2008/2009.

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. FHA loans will allow a seller contribution toward closing costs/pre-paids of up to 6% of the sales price.

If you are looking to purchase a property, 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 mortgage options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com to get started.

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

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203(k) Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
1 vote Thank Flag Link Mon Sep 16, 2013
That will be challenging. I suggest you talk with a qualified mortgage originator. Tell him more about your situation and if you do not qualify now, ask him or her what you need to do to put yourself in a stronger position to qualify for a VA mortgage in the near future.
Tom Lloyd
Ingram & Associates
1 vote Thank Flag Link Sat Sep 14, 2013
I recommend you contact a mortgage company with that question. It may depend on your income. Our mortgage partner last week was talking about new low to moderate income programs that are available.
1 vote Thank Flag Link Sat Sep 14, 2013
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