My credit score is a 587, what type of interest rate will I be looking at for a home loan.?

Answer 1

That's going to hurt you quite a bit. "A" paper currently averages about 6.7% nationally. A 587 credit score would probably hit around 8.5% or so.

Here's a link to a calculator that will give you a rough idea of the influence that credit scores have on loan rates:

http://www.myfico.com/myfico/CreditCentral/LoanRates.asp

Answer 2

you are looking at something in the high 7's to low 8's, unless you go with a Government loan.

There are other factors to consider, besides credit. Medical Bills are Over looked buy underwriting (since medical is a un-forseen event), where as credit cards, are looked at (since you purchased items on a credit card.) Also, Job time of 2 years, what collections are on your on credit report - judgements on credit report. All of these are taken in as a factor on getting a home loan. Credit can be worked on, by adding alternative credit. If you are paying regularly on a cell phone, auto insurance, rent, etc - these are called alternative credit.. All is not HOPELESS - ok - take a deep breath. If your middle credit score is 500 or higher, anything is workable.

Lenders look at the middle score to qualify a person - and if your credit is low, than you will be going SUB-Prime, and any amount over 80 percent does not have MI - There are alot of companies I underwrite for that does NOT charge MI - normally the rate is slightly higher. Say you got qualified and your rate was 8. at par (Par, means that is what rate the lender quotes you, with no addon's to the rate for the lender to make pts on the back - some Lo"s add pts on the rate to make their money - instead of charging it up front). The 8. does not have MI included.


FHA loans have MI included, Conforming A+ borrower's loans have MI included, but the rates are better starting in the mid to high 6's (with rates going up.) The more money you borrow - the higher the rate normally. There are alot of factors involved.

Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 2-6 percent of the selling price, and you ask for 4-5 percent toward closing cost -assistance) Follow me so far??

Talk with a broker, a broker underwrites for many company's (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a "hard" pull and it drags down your credit score.

By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only - not the final - but it does help you figure things out.

Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency's and other useful information.

Answer 3

I just did a loan for a person that had a 574 and was able to get him a 8.00%. Any higher would mean that the loan officer is trying to make a yield spread.

For the lowest interest give me a call Frank 909-489-4692 or check out my website: www.firstmeridiancapital.com

Answer 4

587 is not bad. when i bought my home i got 6% int. and my husband credit was only 580. if you can afford to put about 1500.00 down and save another 600.00 for appraisels and inspections. the next step is to find a realtor that can get you sellers contribution for the closing cost. it can be done. im a loan officer in texas.

Answer 5

It’s not going to be very easy to find a lender that can work with that score, but you could find one that will work with you to better the score. Most lenders are going to be looking for at least a 620 unless you’re going to put a sizable amount down (40%). Talk to a lender, good luck.