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Asked by Steph, Brooklyn, NY Sat Jan 26, 2013

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Christopher…, Agent, Staten Island, NY
Sat Jan 26, 2013
Hi Steph,

Your best bet would be an FHA-insured loan, but you would need at least 3.5% down payment. No money down loans don't exist anymore. Also, you'll need to work on raising you credit scores. Banks are looking at the middle score, so you're at 589 and that's too low for even an FHA mortgage. Hope this helps.
2 votes
Sharon Sulli…, Agent, Staten Island, NY
Sat Jan 26, 2013
You have been given excellent advice. Next, focus on how to improve you credit score. With low scores, you might want to consolidate debt into one or two pyments, and make the payments on time. Avoid revolving credit, don't apply for any new credit cards. That will weigh your scores down. As you slowly reduce your debt, and don't depend on credit, your scores will pick up. Rely on cash, don't spend what you don't have, and your scores will reflect financial health. I know its easier said than done, if necessary speak to a financial counselor to help guide you. All the best to you.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Sat Jan 26, 2013
Consider improving your score and saving up additional money first. Most lenders prefer a 640 credit score; FHA loans require a minimum downpayment of 3.5%. For a personalized answer to the question, visit with any licensed loan officer.
1 vote
, ,
Mon Jan 28, 2013
Good morning Steph,

Please accept my advice to you based on my 23 years as a mortgage professional helping First Time Buyers: put your finances in order before you consider taking on the responsibility of owning a home.

Those credit scores indicate some serious issues that need to be addressed not simply by making the scores better. And the lack of a down payment combined with the credit scores give me serious pause. I know you'd love an answer that you want to hear: "YES! It's possible!" But if I gave you that answer, I'd be doing you a serious disservice and potentially leading you into financial calamity.

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
Mobile: 516-582-9181
Office: 516-829-2900
Fax: 516-829-2944
PowerHouse Solutions, Inc.
185 Great Neck Rd, Suite 240
Great Neck NY 11021
Licensed Mortgage Banker – NYS Dept. of Financial Services

If you thought my answer was helpful, please give me a "Thumbs Up." Thanks!
0 votes
, ,
Sun Jan 27, 2013
Hello to all-
PNC Mortgage will Finance your mortgage with Credit Scores as low as 580 with the FHA loan program. Of course we would ask that you review your credit and try and raise those scores. Most times that's possible by just taking care of some small charge offs and reducing the balance of accounts. There are no programs that will allow 100% Financing, however the FHA will allow a 6% sellers consession. This allows buyers with the permission of the sellers to finance up 6% of closing costs. So if you have money for closing costs and not a down payment, you are now able to use the funds you have for a down payment knowing that your closing costs are taken care of. Keep in mind that the FHA loan program accepts 100% of the down payment to come as a gift. So you may be able to hit up some relatives for a few bucks!! Also first time home buyers may be allowed to liquidate their 401K's without penalty, please speak to your employer about this. Seems like you are in the very early stages of home buying. Please call me so I can advise you on your options. With over 15 years experience in the mortgage industry I would love to share some of my experience with you. Thanks!

Christopher Miceli
Mortgage Loan Officer
NMLS# 22399
Phone: 646-623-2492
PNC Mortgage is a Division of PNC Bank NA
0 votes
"...hit up some relatives for a few bucks!!" Is this how a responsible, Licensed Loan Officer advises homebuyers? Have you learned nothing from the mortgage meltdown? Please remember that is a CONSUMER ADVOCACY website.
Flag Mon Jan 28, 2013
Lorraine Vel…, Agent, Staten Island, NY
Sat Jan 26, 2013
FHA loan would be your best bet..consider contacting a licensed loan officer..
0 votes
William Knoop, Agent, Staten Island, NY
Sat Jan 26, 2013

Chris is 100% correct.

Generally speaking Banks will want to see your Middle Score at 620 or above. Depending on what is bringing your scores down there are sometimes things you can do to improve them quickly. However, as Chris stated you are still limited by the fact that you will need a down payment of of 3.5%.

Best regards,
Will Knoop
0 votes
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