I will be finishing a Debt Management Plan in Dec. 2012 - my credit took a small hit and now is at about 670. Would it be difficult to get a morgage?

Asked by Wannabeintexas, Dallas, TX Fri Oct 21, 2011

Planning on buying a condo in Dallas in January 2013

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12
Tommy Burris, Mortgage Broker Or Lender, Baton Rouge, LA
Thu Oct 27, 2011
Shane is right..... He knows guidelines. Anyone who says NO shouldn't be lending.

If the payment plan payments have been paid on time then FHA allows this.

Other guidelines still apply.... debt ratios, income, assets, ect.


Tom Burris
Mortgage Banker
DallasLoanGuy.com
(214) 763-4629 cell/text/nights/weekends(Really!!)
tomburris@dallasloanguy.com
Lending all across the entire Great State of Texas!!
1 vote
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Sat Oct 22, 2011
Debt management plan is not the same thing as a Ch 13 BK, and there is no required waiting period like I mentioned. Some lenders may make up their own guidelines, but in large most lenders don't have a problem with being on or have completing a debt management plan.
1 vote
Shane Milne, Mortgage Broker Or Lender, South Jordan, UT
Sat Oct 22, 2011
What it will primarily come down to how the debts that are included in the debt management plan are reporting to your credit.

In a debt management plan sometimes they all report on time, sometimes they all report late, sometimes it's a mix of late & on time. So if you have some that are going to report late all the way up until the plan is complete, you could have some problems when it comes to underwriting if you want to buy right afterwards. However if they are all reporting on time then the fact that you were on a debt management plan probably wouldn't even come up.

In the situation where some/all would report late until the plan is complete, if you have made all of your plan's payments on time and the management company would be able to verify as such, then it would likely be acceptable if you chose to go with FHA financing.

670 scores are fine to qualify for both FHA & conventional financing (with conventional you may need at least 10% down with that score though), but if there are late payments reporting during the management plan then it may be tough to qualify for conventional so soon afterwards.

You may be surprised to know that it's even possible to qualify for financing while you are still in a debt management plan, probably not advisable if someone is trying to dig themselves out of debt, but it's possible.
1 vote
Jay Narey, , Dallas, TX
Fri Oct 21, 2011
I just attended a Conference with several Economists and Mortgage Bankers presenting. A FICO of around 670 will probably be enough to qualify you for an FHA Loan....however it is NOT high enough to qualify for a Conventional Mortgage - you really need to be above 720 to be on the safe side. Naturally, the more you are able to "put Down" on the property - will make you look like a more appealing borrower to a lender - because they'll see you're putting "skin in the game" so to speak - which is what more and more Lenders/Banks want to see these days. Make sure you don't go out and buy a new car, or open any new credit card accounts of anytime - and make certain your bills (particularly revolving accounts) are paid on time.
But there is one other CRITICAL factor involved that you need to look into as well - and that is whether or not the Condominium development where you are planning to buy has been "re-certified" as an FHA approved complex ! I was recently involved in selling a Condo on Turtle Creek - and even the building property manager didn't know if the bldg. met the new FHA certification guidelines !!!
I even had other Agents calling me - because they didn't research the information and were asking ME
for the status of various Condos around town.

So you want to work with a competent Realtor - who doesn't "miss" important issues when you go to buy !
Even if your credit is good enough to qualify for a Loan - the Condominium might not be "re-certified" as an approved complex by FHA - and if not - you will NOT be able to secure the FHA Loan on the property.

My advice is continue to work on your credit - and get it up to 720 if you can - that way you will have multiple financing (borrowing) options when you are ready to buy.

Best of luck - and congratulations for getting your Debt under control !!!
JAY NAREY ABR, ALHS
Keller Williams
jaynarey@kw.com
Web Reference:  http://www.jaynarey.com
1 vote
Chris Hutchi…, Agent, Hurst, TX
Fri Oct 21, 2011
I specialize in working with people like you. I will walk you through the home buying process from mortgage underwriting to finding the condo to closing on it.

I work with lenders that don't have outrageous down payment arrangements and have programs that may not require a down payment at all depending on your circumstances.

Give me a call and we can discuss your options in detail and develop a plan that will help you purchase your condo.

Given what you told me I don't think you will have a major problem as long as you work with the right professionals.

Chris Hutchinson
The Chris Hutchinson Team
The Michael Group Real Estate
972.809.0607
http://www.chrishutchinsonteam.com
1 vote
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Sat Oct 22, 2011
hI, Wannabeinteax. Regardless of your credit score, lenders require a 12-24 months waiting period after someone comes out of a debt management plan and/or Chapter 13 before they can qualify for a mortgage.
0 votes
Bruce Lynn, Agent, Coppell, TX
Fri Oct 21, 2011
Well it will depend on a lot of other factors other than just credit score.
Debt to income, income, job history, and a few other items.

I would suggest you get with a loan officer now and have them give you some advice.
They can suggest a price range, down payment and closing costs info, so you know how much to save, etc.

Sounds like you're on a plan....so good job.
Web Reference:  http://www.teamlynn.com
0 votes
Chris Hutchi…, Agent, Hurst, TX
Fri Oct 21, 2011
I specialize in working with people like you. I will walk you through the home buying process from mortgage underwriting to finding the condo to closing on it.

I work with lenders that don't have outrageous down payment arrangements and have programs that may not require a down payment at all depending on your circumstances.

Give me a call and we can discuss your options in detail and develop a plan that will help you purchase your condo.

Given what you told me I don't think you will have a major problem as long as you work with the right professionals.

Chris Hutchinson
The Chris Hutchinson Team
The Michael Group Real Estate
972.809.0607
http://www.chrishutchinsonteam.com
0 votes
Dallas Texas, Agent, Dallas, TN
Fri Oct 21, 2011
Much more involved qualify for a loan than just a credit score.

However if you have 670 score there should be no problems IF you meet other standards for loan qualifications.

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
972-699-9111
http://www.lynn911.com
0 votes
Beau Beasley, Agent, Dallas, TX
Fri Oct 21, 2011
I think you can get a mortgage, but you may not get the premium rate, and you may need to put down 20%. You need to speak with a lender. Call this guy:
Allen Lester
North American Lending
alester@ntfn.com
Cell# 469 684-9864
Office# 972 759-5271

He won't take but just a few minutes to let you know. Good luck! Call me if you'd like me to help you find something.

Beau Beasley 214 966-2100
0 votes
Kenneth "Ken…, Agent, Dallas, TX
Fri Oct 21, 2011
To qualify for FHA you need a FICO score to be at 640 or higher. I think your good to go. But, you really need to talk with a mortgage lender of your choice. They don't charge to get pre-qual for free.

GOOD LUCK.

Kenny
0 votes
BG, Home Buyer, Phoenix, AZ
Fri Oct 21, 2011
if you can get it above 720 (I think) you will get the best rate .....
0 votes
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