OK, My credit score is just under 600. Why is it so hard to get approved for a home loan? Is there any programs to help us?

Asked by Ryan, 17022 Wed Oct 6, 2010

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16
Jessica Bate…, Agent, Beverly Hills, CA
Sat Sep 28, 2013
Yes there are, you just are not speaking to the Lenders probably.. FHA loans require a 580 score, Conventional require a 620.. I recommend The Lenders Network, they can refer you to an agent to help you find a home and a Lender or two that can get you pre approved.

Good Luck!
3 votes
Alan Openshaw, Mortgage Broker Or Lender, Southampton, PA
Wed Oct 6, 2010
Hello Ryan.

The reason that it is so hard to get a home loan is( quite honestly) that your credit score is not that good.
I do have mortgage programs for people with scores down to 540 but there has to be some compensating factors as to why a lender will approve you.

Regards,
Alan Openshaw
Cornerstone Lending Inc
267 992 7276
1 vote
Johnathon Mi…, Home Buyer, Houston, TX
Sat Aug 10, 2013
You can get approved with under a 600 credit score for home loan. I had a 580 credit score and got approved for an FHA loan just 3.5% down, The Lenders Network sent me to one of their lenders to get me approved so I would them first.

Good Luck!
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Wed Jul 10, 2013
Good afternoon Ryan,

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
Mark Jacoby, , Lancaster County, PA
Thu Oct 7, 2010
I apologize that no one in the real estate or mortgage business has taken the time to help you fully understand the mortgage process. I encourage you to get in touch with an excellent local mortgage counselor who is very capable of walking you through the minor things you may need to do to improve your credit score & get fully approved for a loan. Her information is: Melinda Trent of MNET Mortgage 717-468-6069, Email: mtrent@mortgagenetwork.com

Once you are ready, we'd be more than happy to sit down with you and walk you through the process. Good luck!
0 votes
Oggi Kashi, Agent, San Francisco, CA
Thu Oct 7, 2010
Ryan,

Here is one link of many on articles about improving you credit score.

MSN Money: "7 fast fixes for your credit scores..."

http://articles.moneycentral.msn.com/Banking/YourCreditRatin…

I hope this information will help everyone.
Web Reference:  http://www.oggikashi.com/
0 votes
Dp2, , Virginia
Thu Oct 7, 2010
You might consider doing a lease-option.
0 votes
Jeannette Ca…, , Chambersburg, PA
Thu Oct 7, 2010
Ryan,
Rapid rescore is a good option, but it does cost money in order to do this. I do know that Prosperity Mortgage accepts buyers with 600 credit scores. The parent company of Prosperity is Wells Fargo. Here is the phone numbers of a good loan officer you can call.
Jason Sheaffer
717-267-2243 Office
717-360-6372 Cell
0 votes
Roger Weymou…, Agent, Holt, MI
Wed Oct 6, 2010
Ryan, yes there is hope. 600 is not that bad of a credit score. You are 40 points away from getting FHA financing. Have you heard of rapid rescore. Alot of lenders use the services of companies that actually go through your credit report and contest all derogatory marks. The merchants have apso many days to respond. If they don't respond the mark comes off your credit report. Their is a lot of other things they can do to clean up your credit report. I've seen crdit scores raise 100 points in 60 days. Good luck Ryan
0 votes
Melissa Bros…, Agent, Lancaster, PA
Wed Oct 6, 2010
As a resident of Lancaster County, there's another resource that may be worth investigating. Tabor Community Services is located in Lancaster City and they provide a range of financial and homeownership services. This is there website: http://tabornetorg.presencehost.net.

Once you get to where you can qualify for a mortgage, there are additional programs that may also help you like the Lancaster Housing Opportunity Partnership (LHOP). Please feel free to contact me for more info.
0 votes
Gerard Dunn, Agent, Chevy Chase, MD
Wed Oct 6, 2010
The secondary mortgage market - aka Fannie Mae and Freddie Mac will not purchase mortgage loans with scores below 620.

The local banks do not want to approve and fund a loan that they cannot sell to Fannie/Freddie. With interest rates so low - it does not make sense for them to hold these loans.

best advice is to increase your credit score to 620 or more. The higher you can get your score -the better deal you will get.

Good luck!

Gerry Dunn
Associate Broker
703-216-9100

Serving Maryland, Virginia and Washington, D.C. for 28 years
0 votes
Terrence Cha…, Home Owner, Allentown, PA
Wed Oct 6, 2010
In this economy, it is very difficult to find lenders out there who will aide those with poorer credit ratings. The main thing that can be done is to raise your credit score. Here is a link which have tips to raise that score.
0 votes
Ed Fallon, M…, , West Chester, PA
Wed Oct 6, 2010
If you are a first time home buyer, the PHFA Keystone Home Loan program may be an option for you.
0 votes
Anna M Brocco, Agent, Williston Park, NY
Wed Oct 6, 2010
If you haven't done so yet, do visit with any qualified loan officer(s), see if you qualify for a loan, and have your credit score checked as their scoring is often different--your loan officer can suggest great ways to improve your score in the fastest time--if needed, consider paying off old debt, pay down debt, keep credit cards below 50%, dispute any old negatives, etc.
0 votes
ANDREW OLLICK, Agent, NAPLES, FL
Wed Oct 6, 2010
The minimum credit score for most ( if not all programs) is 620. There are some lenders out there that used to do loans with 580 and above as long as there are no collectiojns, however they all just raised that requirement to 600.
If you're slightly under 600, you need to talk to a mortgage broker and have him/her let you know what you can do ( pay off certain cards, open a new account, etc) to raise the score. You can then do RapidRescore and your credit should be where you need it.

Good Luck!

Andrew and Elena Ollick
Amerivest Realty
239-206-4500
eo@oceanhomesrealty.com
Latest Post: Naples Luxury Home on Fire
http://www.andrewollick.com/realestateblog
0 votes
Andy Del Real, Agent, Modesto, CA
Wed Oct 6, 2010
Hi Ryan

Banks (Lenders) are getting a lot more strict when it comes to lending. Have a lender check your credit report and he/she should be able to tell you what you can do to boost up your score in the matter of a few weeks. One of my lenders helped a client of mine boost up their score by 40 points in 2 weeks.

Good Luck

Indalecio Del Real aka Andy
Web Reference:  http://www.AndyDelReal.com
0 votes
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