My husband and I have poor credit. We are looking at a house that costs about 300,000. Would any bank loan us money?

Asked by n_chole, Salinas, CA Fri Mar 15, 2013

Our credit scores are between 609-640 due to significant student loans, however we both have decent salaries (together we make approximately 155,000). We also have 15,000 saved for a down and costs.

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, ,
Wed Mar 25, 2015
Hello n_chole, you may qualify to buy with minimum out of pocket expenses with those scores with low interest rate and premium financing.

You may qualify to buy FHA with fico scores between 500-579 with 10% down or minimum 580 fico score may qualify FHA 3.5% down or as low as .5% half percent down payment program. You may consider 3% down conventional from a minimum 620 fico score. Your fico scores can be raised within 3-4 days in most cases to qualify for programs, rates and terms as necessary.

You will need to be pre-approved to know your purchasing power and to be able to meet an agent to view and submit offers on any homes of your choice. Your qualifications will be determined by your credit profile, debt to income ratios, fico scores, home price, loan program and how much you want to invest into the down payment and closing costs.

If you figure out what cities/zip codes you are considering, minimum number of bedrooms and the maximum payment/price you are looking to achieve you can be emailed listings to fit your search criteria. Your email address is needed to set you up for the automatic daily updates.

It only takes a few dozen questions to qualify, go over your options and email you listings to study and compare. Here are some links to study as well as web reference links to many loan program pages offered...

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, ,
Thu Jun 27, 2013
Good afternoon n_chole,

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.

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.…

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

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n_chole, Home Buyer, Salinas, CA
Sun Mar 17, 2013
To address Cindy's statement our student loan debt is about 450,000 (my husband and I both have professional degrees) so our debt to income is heavily unbananced. In addition we have 2 negative factors; one is a late payment in October and we had a medical bill slip through last year that went into collection. We have revolving debt but it is insignificant to the loans. Sadly you may be right, it may be long time before we will ever own a home. Our rent is so high in our area that owning a home would cut this monthly expense in half! (we pay 2300 a month for rent). Thank you all for the advice and tips.
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Gregorio Den…, , San Diego, CA
Sat Mar 16, 2013
The $15,000 down payment would actually be enough for a $428,000 purchase with 3.5% down. The down payment if not the problem. Your income also is fine as are your credit scores. A potential stumbling block may be the student loans if not deferred.

From the information you have given there is no reason you should not be able to qualify. Obviously a lender would need to see the entire picture to make a determination but you should speak with a qualified, licensed loan officer to find out. Let me know if I may assist you.
Web Reference:  http://WeFixRates.Com
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, ,
Sat Mar 16, 2013
Yes you can get FHA loan, the minimum score required is 560. We do FHA loans with this score and approve loans within a few hours without any upfront charges.
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Cindy Davis, Agent, San Diego, CA
Sat Mar 16, 2013
Now why would you want to buy a homes with your credit is poor. You do have decent salaries but there is more to your credit score than student loans, I suspect.

Even though you are making decent salaries, you don't have nearly enough saved up. Talk to a lender, and get your spending under control. There's something here that you are not sharing..

Good luck to you.
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Michael Cheng, Agent, San Jose, CA
Fri Mar 15, 2013
Unfortunately, it's your lack of downpayment that is a bigger constraint in this market. There are banks who can handle little credit to poor credit, but without a significant downpayment, you won't be able to win a bid or qualify for the loan. At that price point, you'll come up against plenty of cash buyers or people who don't need any loan or appraisal contingencies, which you aren't able to give up.

Since you have such good income, focus on saving up $75K in the next 6-8 months and try again at the end of the year to have a good shot at a home.
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