My credit score is currently 580, what are my chances for getting pre-approved for a home loan?

Asked by Johnathon Miller, Houston, TX Sat May 11, 2013

I have been told I need a 640 by all banks, but their has to be a way to get a home loan with FHA as a first time home buyer with a 580 right?

Thanks!

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9
Jessica Bate…, Agent, Beverly Hills, CA
Wed Jul 3, 2013
BEST ANSWER
There are brokers that will be able to find you a lender to do the loan even with a score under 600. I have had several clients get approved and close on homes without even having a 600 credit score. I recommend The Lenders Network to my clients without a pre approval, they go down to a 580 for FHA loans and just 3.5% down.

Good Luck!
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Mon Aug 5, 2013
Good evening Johnathon,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
http://www.consumer-action.org/

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
0 votes
Kyle Farmer, Agent, Houston, TX
Mon Aug 5, 2013
Johnathon,

I have been in the Real Estate industry for a little over 14 years now with experience on the mortgage lending side. There are a few places (mortgage bankers and not the big banks or depository banks) that can help with this. I have a few that i use and recommend to my clients that are in this situation. If you would like more info and who to contact please do not hesitate to contact me at 832-896-3779 and I can give you all the info. A few places will also be able to help you with a larger down payment as well such as 10% down as oppose to 3.5% which is the standard FHA down payment. I am glad to assist you either way.
0 votes
Roy Bush, Both Buyer And Seller, Phoenix, AZ
Sun Aug 4, 2013
I had a buyer that wanted to buy a home in Arizona, but he had a Chapter 7 bankruptcy 7 months ago. I introduced a loan program at http://www.cfsflex.com, they allow a mortgage after a foreclosure, short sale, or bankruptcy. There is only a six month waiting period. This is perfect for individuals looking to become homeowners again.
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Mon May 13, 2013
Good morning Johnathon,

We see many credit reports with low credit scores (anything less than 620), and often many scores in the 500's. This is BAD credit. If you are one of the folks affected by this terrible economy, you have a low credit score and you have a dream of buying a home, here's some simple advice for you.

It is unlikely you could be approved for mortgage financing with that credit score at this time.

Beware of any mortgage professionals promising you an approval with such a low score. Wait on buying a home. I recommend you take the time to resolve your credit issues.

First, settle any outstanding debt. If you owe money on collection accounts, charge-offs and/or judgments, make payment arrangements and get these accounts paid promptly.

Next, begin rebuilding your credit. If you have current accounts with good payment histories, or even some previous late-payment-blemishes, make sure you continue to pay those accounts on time. If you do not have any existing credit accounts then you'll need to establish several in order to create a viable credit history.

I have found that CONSUMER ACTION is an excellent resource for objective advice on all things credit related. You'll find free and sincere advice on everything from settling collection accounts to rebuilding credit to building credit from scratch on their website.
http://www.consumer-action.org/

Beware of anyone offering to "repair" your credit! The Federal Trade Commission issued a stern warning last year that such offers are scams. Find more from the FTC HERE.
http://www.consumer.ftc.gov/articles/0058-credit-repair-how-…

The best way to buy a home is to have a decent credit history combined with sufficient Income and Assets for a home purchase.

The best way to have a decent credit history is to settle negative outstanding obligations and pay all your bills on time for at least two years.

Trevor Curran
NMLS #40140

*If you thought my answer was helpful, please give me a “Thumbs Up” or “Best Answer.” Thanks!
0 votes
K.C. Jones, Mortgage Broker Or Lender, Irving, TX
Mon May 13, 2013
We finance FHA (3.5% down) loans with middle credit scores as low as 580.

Feel free to apply online at http://www.rhlapps.com/kjones or give me a call.

K.C. Jones
RH Lending
214-432-0486
kjones@rhlending.com
0 votes
Laura Rosales, Agent, Austin, TX
Sun May 12, 2013
Hi Johnathon, You are right on the bottom edge of getting approved. FHA has recently increased there credit requirements and also increase the mortgage insurance premiums so I would recommend that you spend a little time getting your score up to a 640. That will significantly decrease your overall payment. Pay down your dept - that will make your score jump up.
Best wishes!
0 votes
Jared Troutn…, , Houston, TX
Sun May 12, 2013
Johnathon, it can be done on the wholesale, not retail level, by a mortgage broker, not big banks like Chase or BOA. Your loan must manually underwriten, no automated approval. Why are your scores this low, foreclosure, or recent bankruptcy ? Call 281 586 5545 to learn more, Leave your contact info.
0 votes
Persis Behra…, Agent, Cinco Ranch, TX
Sat May 11, 2013
Dear Johnathon, I can refer you to someone and you can check what your options are.

Persis
persis.realtor@gmail.com
713-294-7747
0 votes
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