Can you qualify for a home loan with a credit score in the 600-650 range?

Asked by changing1.06, Grandview, MO Sun Mar 10, 2013

We're working on paying things off and down, in order to qualify for a home loan. (Which even with that, I'm not sure where to start.) We don't have a lot in our actual savings account. However, we have enough for a sizable down payment through a 401K. We're first time home buyers, so we wouldn't even need all that much. We're not even looking for an expensive house (around the 80K range) but both mine and my husband's credit isn't stellar. Is it reasonable to hope that we could qualify for a loan? (Our scores should go up after we pay some stuff off.)

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Michelle Gib…, Agent, Lee Summit, MO
Fri Sep 27, 2013
I agree w/ both Garrett (paying off debt may not necessarily be the most beneficial thing to do) and Darin (get a good mortgage person). Finding the right mortgage person is like finding the right doctor; if you don't like what they say ... find another one! I would highly recommend NOT going to your local bank, but going to several places who only do mortgages! I have several that I refer clients to every day that can get you pre-approved for a CREDIT SCORE as low as 580! GO AHEAD ... DO YOUR HAPPY DANCE!!!
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Darin Jones, , Belton, MO
Mon Mar 11, 2013

Yes you probably can qualify, but I would strongly suggest contacting a good mortgage person before doing anything.......including paying anything off. Also, the credit report that a mortgage person sees is going to be different than what you can obtain.

Many houses qualify for FHA loans with only 3.5% downpayment, but in smaller towns and in rural areas, you can get a USDA loan for $0 down. VA loans are $0 down also.

I can be reached at 816-419-6508.
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Garrett Thill, Agent, Imperial, CA
Sun Mar 10, 2013
It depends on the situation. You may qualify for an FHA loan with a 640. The reason I wanted to reply is you mentioned "paying off". Please consult your lender before doing this. You may actually benefit from carrying small balances on your trade lines. Some people make the mistake of paying it down to 0 and then their will be nothing to report to the credit bureaus. I am not a licensed mortgage professional, so I highly recommend talking to one as most reputable ones will help you free of charge! :)
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