Our credit scores (first time home buyers)

Asked by Elizabeth<3, Salisbury, MD Wed May 5, 2010

My husband and I are considering purchasing our first home. We make approximately $80,000/ year. His credit score is roughly 740. Mine is 639. (He also makes more of the money than I do.) Will my score adversly affect our chances of getting a loan? I'm assuming an FHA is our best option. Thanks!

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4
Michele and…, Agent, Millersville, MD
Wed May 5, 2010
Regarding the approval, your score is fine. As others have stated, with FHA AND coventional loans, 620 is the minimum required score. Many lenders will have NO pricing adjustment on the FHA loan for the score, but WILL have an adjustment on the conforming loan. The FHA will require 3.5% down while the conforming will require 5% down and the loan can ONLY be in your husbands name AND his debt compared to gross income after the purchase cannot exceed 41%. Lots of info, I know.

FHA OR VA, if either of you are veterans; are probably your best options.
Russ
1 vote
Anna M Brocco, Agent, Williston Park, NY
Wed May 5, 2010
If you haven't done so yet, visit with any qualified loan officer(s) first, see exactly what your budget can handle and check your credit scores again--their scoring is usually different--if your credit needs improvement, your loan officer may suggest ways to best improve it in the fastest ways. And yes, an option may be an FHA loan as they currently require a minimum credit score of 620 and 3.5% down.
0 votes
Alan K, , Westminster, MD
Wed May 5, 2010
It looks like you're in pretty good shape. But there's only one way to know... ask a mortgage officer for a letter of pre-approval. This won't cost you anything, you're under no obligation, and it won't hurt your credit rating. They can usually be done over the phone, and can be done in as little as 48 hours.
0 votes
Dp2, , Virginia
Wed May 5, 2010
Unless he could qualify for the loan based solely upon his income, then your score will affect the rate that you 2 will receive. Yet, some lenders will also consider other factors.

If you don't like the rate that you're quoted, then another option for you might be to purchase with seller financing. You could meet with a mortgage broker to qualify you both for a loan now, and find out how high you'll need to raise your score to get the rate that you want. Next, meet with a financial planner to help you set up a plan to raise your score to that target within a specific amount of time. Afterwards, work with the seller to structure the duration of that seller financing to coincide with your schedule.
0 votes
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