Hi everyone! Are there still any lenders that will take a 580 score?

Asked by Ilene, El Paso, TX Thu Aug 13, 2009

I have 20% down the house is 102,450 so i would finance 83k im working on my score im at a 590-600. I heard that some places still have lenders that take 580?

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14
Lane Harris, Agent, El Paso, TX
Tue Aug 18, 2009
BEST ANSWER
As stated by the previous Mortgage professionals FHA guidelines require no minimum credit score and with 20% down and a credit score between 590-600 you shouldn’t have a problem getting approved for a home loan. I'm a Realtor in El Paso and work closely with several mortgage companies that can assist you. You can contact me phone or e-mail, LaneHarris@sellersbuyers.com or (915) 443-8423
0 votes
Trevor Curran, Mortgage Broker Or Lender, Great Neck, NY
Mon May 20, 2013
Good afternoon Ilene,

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
Patti Kane, Home Buyer, Boulder, CO
Sun May 19, 2013
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I am very happy to be able to purchase again.
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
0 votes
Amber McGill, Agent, El Paso, TX
Wed Dec 30, 2009
Hello Ilene,
Rocky Mountain Mortgage is still looking at 580 credit scores, but you cannot have any new collections within the last year. You can have old collections prior to this last year but no new collections as of this year. Pat Palmer is the loan officer she is at (915) 791-4143.

If I can help out, my number is (915) 449-3201.
Web Reference:  http://www.ambermcgill.com
0 votes
Keep in mind this was back in 2009. Most lenders now look at a 2 year credit history.
If there is recent derogatory credit there must be an extenuating circumstance that led to that issue. Lenders weight out level of risks and do look at the entire financial picture, for ex down payment, score, assets, recent collections, public records. Anything recent will really affect you. Only time can help. If it has been 2 years or more since the collection it will not affect your score as much. Hope this helps.
Flag Thu Jun 13, 2013
liars!! rocky mountain wont do that to you. we just got turned down with them. false advertisement
Flag Mon Feb 25, 2013
David Oaxaca, , 79936
Tue Nov 10, 2009
Yes it is possible to purchase with 20% down if your FICO score is 580.

One thing I would advise is double check your three major credit report files, Experian, TransUnion, and Equifax, you can get a free report from them going through Annual Credit Report.com. Challenge any inaccuracies and outdated information being reported, this might help you bring your score up. You will be surprised how much bogus information is being reported on most consumers.

Hope this helps you.
0 votes
Maricela And…, Agent, Austin, TX
Wed Oct 7, 2009
I have a lender that will work with a 580 score as long as you have rented for 2 years from a landlord not related to you. Call Albert Rolon = Marquis Mortgage 915-630-1376. Let him know I referred you and if I may be of assistance, please do contact me at 915-549-6530, Maricela Andrade, ERA Sellers, Buyers and Associates; maricelaandrade@sellersbuyers.com;
0 votes
Enrique Igle…, , Tampa, FL
Sat Aug 15, 2009
Hello Ilene! I am mortgage planner in Tampa, FL. One of the lenders we deal with in Texas has an FHA portfolio program that accepts 580 credit scores for a home purchase. It would require only 3.5% down payment, and if you have not owned a home in the past 3 years, you will qualify for the $8000 Tax Credit after closing. I can offer additional information if you are interested. You can email me at lowratehomeloans@gmail.com, or contact me at 813-421-2735. Thanks!
Web Reference:  http://www.buyorrefi.net
0 votes
Tommy Burris, Mortgage Broker Or Lender, Baton Rouge, LA
Fri Aug 14, 2009
http://dallasloanguy.com/docs/about_credit.pdf

Here is a free book about credit..... Maybe you can get your scores up soon.

Try Wells Fargo or BofA locally. They should work with you bases on what I know of this scenario
0 votes
Steve Fergus…, , Austin, TX
Fri Aug 14, 2009
There is a common misconception out there that the lowest score any lender will accept is a 620 and that is simply not true. FHA guidelines allow for no mimimum credit scores however many lender have made their own guidelines restricting credit scors that are less than 620. With 20% down you have several options for home financing at your disposal. I am more than happy to walk you through what needs to be done in order to increase your credit scores to a 620 so you can obtain a better interest rate. It is important to know that even though some lenders allow scores lower than a 620 there are rate adjustments for these scores. I hope this helps and take a look at our website if you have more questions. Thank you.
0 votes
Luke Allison, , Asheville, NC
Thu Aug 13, 2009
Nene-
I know that we will do a conventional loan with a 580 score so you are welcome to work with us. I am sure there are some other lenders who will do it but you will want to work with a bank directly instead of a broker.

If you have any questions, feel free to contact me.
Luke Allison
Bank of America Home Loans
828-777-8828
luke.allison@bankofamerica.com
0 votes
Jenny A. Le, , California
Thu Aug 13, 2009
FHA loan programs would consider credit scores as low as 500.

Although please NOTE: FHA has an upfront mortgage insurance premium (UFMIP) AND a monthly mortgage insurance premium (MIP)...although I believe these costs are well justified to help you become a homeowner and to help you begin building your personal wealth.

You should know that the Banks make their decision to lend based on the the borrower's 4 Cs:
1. Character (your credit payment history...NO credit is better than late payment history)
2. Capacity (income - verifiable and steady)
3. Capital (liquid assets - sources of down payment)
4. Collateral (appraisal value of the property you are considering to buy)

Therefore, your credit score is just 1 factor of the overall credit package.

Refer to here to find an experience local FHA lender: http://www.hud.gov/ll/code/llslcrit.cfm

Also, make sure you ask the FHA lender to submit a "manually" underwrite loan package so the FHA lender could help you to manually justify the compensating factors for your 580 score...this approach will give you a higher chance of loan approval. An "automated" underwriting loan package will reduce your chances.

I hope the information helps.
0 votes
Thank you so much for that answer. The lender I work with will also do FHA with a 500 score, however they do look to see if there are other strong compensating factors such as a larger down, they do frown upon recent derogatory credit. The key here is look at the whole picture, not just the credit score. Usually low scores indicate there is some serious credit issues happening. In my experience scores in that range after pulling credit will show big credit issues.
Flag Thu Jun 13, 2013
Dallas Texas, Agent, Dallas, TN
Thu Aug 13, 2009
Try increase your credit scores move forward purchase a home. or lease purchase house you want buy after you resolve your issues. Scores need be approx. 620 +

National Featured Realtor and Consultant, Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Lynn911
Web Reference:  http://www.lynn911.com
0 votes
Sean Dawes, , Philadelphia, PA
Thu Aug 13, 2009
Some will do 600 but most lenders now require the 620 fico. Do you have any debt that is hurting your score? Why not take 10% of that cash and lower your debt to credit ratio? A 620 fico will get you FHA which requires 3.5% down. Then you need money for closing costs which I do not know what they are in TX.

Just a thought. You could consult a professional in credit repair or finance if you have any questions prior to making the decision.


Sean
0 votes
Ilene, Home Buyer, El Paso, TX
Thu Aug 13, 2009
Oh and have 2 yr + credit history never late.....my credit is immaculate, just paid 6k in debt(some has not reflected)
0 votes
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