What if I had a down payment of 20,000.00 toward a home but my credit wasn't great will I still be able to purchase a home?

Asked by shirley_darden, McDonough, GA Tue Jul 16, 2013

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BELINDA DUMAS, Mortgage Broker Or Lender, Stockbridge, GA
Wed Aug 28, 2013
Hi Shirley, This is BeLinda Dumas from Academy Mortgage. Most of the time if you have a minimum of a 620-640 and no late payments or new collections in the last 12 months, your scenario is workable with a 2 year work history, good income and no foreclosure or bankruptcy in the past 2-3 years.

For reference, if you have had a foreclosure, the wait period is 3 years from the date the deed is recorded and if you had a previous bankruptcy, (chapter 7) the wait period is 2 years.

If I can help you in any way, you can email me at Belinda.dumas@academymortgage.com
0 votes
Jerri Sims, Agent, Clayton, NC
Wed Aug 28, 2013
I am not a lender or loan officer but credit does matter - you can call Andy at New Star Mortgage 404-346-6565 or Belinda at Academy Mortgage 770-231-3114 and either of them will let you know what you can or can not do. They are both awesome loan officers and will get you pointed in the right direction.

Jerri Sims

Once they get you approved if you are not working with anyone I would love to help you find your home.
0 votes
Ginny Herman, Agent, Blue Ridge, GA
Thu Jul 18, 2013
Credit score
debt to income ratio
job earnings and length of time at the job
are what is needed to qualify for a mortgage
the down payment amount will determine the max amount of home sales price , but first the other items create your ability to quilfy for a mortgage
good luck!
Ginny Herman
Prudential ga realty
0 votes
Rodney Mason, Mortgage Broker Or Lender, Atlanta, GA
Wed Jul 17, 2013
Hi Shirley,
The answer to that question will partially depend on how "bad" your credit is. For an FHA mortgage, most lenders require a 640+ credit score for the last 3-4 years now.

Prospect Mortgage is one of the few direct lenders to offer an FHA 580-639 FICO loan program. Credit profile is a major factor in a mortgage approval. Generally, there should be no late payments, new collections accounts/charge-offs/liens/judgments in the last 12 months. It is required that all open collection accounts must be paid in full if their cumulative balances exceed $1,000.

The 3.5% minimum down payment can be from the borrowers own funds or it can be gifted from a family member. Two months of reserves for the PITI (Principal + Interest + Taxes + Insurance) payment + HOA Dues will be required. This must be from the borrower’s own funds and not a gift.

To begin improving your credit score, you would need to contact each of your creditors directly to see what your options are. Paying off derogatory debt will help improve your credit score in the long run, but not immediately.

With collection accounts, most of the damage is done when they are initially placed on your credit report. Some collection companies are now reporting you are late each month the debt goes unpaid. This continues to drag on many people’s credit scores each month until the debt is paid in full. Until you do that, your credit score has little chance of improving.

In exchange for paying the collection account in full, you can try to negotiate to have them completely remove the derogatory item once the payment is received. Some collection agencies will do this, while others will not. You will just have to ask each one and see. If they will not remove it, just having it paid and closed will help in the long run.
All liens and judgments will also need to be paid in full. These impact the title position of a mortgage so they must be satisfied.

It is very important that you be VERY careful in disputing accounts. You cannot dispute accounts which you know to be accurate. For a mortgage, you cannot have an active and open account that has a disputed status. Fannie Mae/Freddie Mac/HUD all have very specific guidelines to be following when a borrower has an account in a disputed status. In some cases, it could cause you not to be able to qualify.

To build positive credit, you typically need to have 2-3 trade lines reporting for 12-24 months. There should be no late payments or other derogatory items reported in the last 12-24 months. On your Revolving credit accounts, your outstanding balance on your monthly statement should not exceed 30% of the credit limit.

If you are looking to purchase a property, working with a knowledgeable and seasoned loan officer is critical in today's market. Getting Pre-Qualified is the only way for you to find out your mortgage options. To get Pre-Qualified for your purchase, you can submit your request online at http://www.rodneymason.com.

Rodney Mason, NMLS #151088
Sr Loan Officer
Prospect Mortgage
825 Juniper St NE, Atlanta, GA 30308
Office: (404) 591-2453
Apply Online at http://www.rodneymason.com
Licensed in Alabama & Georgia with over a decade of mortgage lending experience.

Prospect Mortgage offers a full selection of mortgage programs including:
Conventional | FHA | FHA 580-639 FICO | FHA 203K Renovation (Streamline & Consultant) | HomePath® | HomePath® Renovation | HomeStyle® Renovation | VA | USDA | GA Dream | Jumbo Financing.
0 votes
Betty D. Scy…, Agent, GA,
Tue Jul 16, 2013
If you were interested in Cherokee or Cobb Counties, I sure would try to get you into a good house for a good price. Let me know if I can help you. bscyphrs@aol.com
0 votes
I'm looking into Henry County.
Flag Tue Jul 16, 2013
Curly Sue, , Texas
Tue Jul 16, 2013
That depends on your credit score & how much you are needing to borrow.
0 votes
My credit score is 605 and I own my own home now looking to sell my home for a down payment toward a new home.
Flag Tue Jul 16, 2013
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