Can you purchase a home with a 602 credit score?

Answer 1

Here is a brief Home-Buying Course 101 I do with new buyers:

Min score for FHA is 580. As long as you have sufficient income, 2 yrs on the job (a college degree counts if you are using the degree in your job), last 2 yrs tax returns or W-2, last 2 check stubs, last 2-3 months bank accounts statements, no late payments for the last 12 months, no unpaid charge-offs your chances are as good as anybodys.

Your payment will be calculated at 29% of your gross pay (before taxes). The max debt will be calculated as 39% of your gross pay, to include any outstanding debt that will not be paid off in less than 10 months like: daycare, child support, student loans, car or credit card payments, basically any reoccuring debt you are paying on including the proposed house payment. They will then calculate the price range of home to seek. FHA requires a 3% down payment and closing costs will average about 3.5% of the loan amount. Your real estate broker can ask the seller to cover that for you out of their sale proceeds or a family member can "gift" you the closing funds. If you are getting married you can also do a bridal registry at a local lender. If you are a first time buyer there may be special programs available to assist as well. Demand a fixed rate as adjustable rates will only be going up in the near future as they already are historically low. Special programs for first timers usually are a bit below market anywayif you qualify.

Choose a full licensed real estate broker, one with the highest level of real estate license status your state recognizes. They also should have minimally the CRS and GRI designations. Look for the top 3 agents in an office as they usually are go-getters and will do a good job as their track record speaks volumes.

I feel that 100% financing is not in your best interest becaue if you get in a bind and must sell you have no cushion until you have been there a few, perhaps several years, and you are even slower to build equity, meaning your wealth. As for building credit scores, pay your credit card bill in full monthly, pay all bills on time.

There is no real advantage in paying your phone bill months in advance. There are advantages in paying off debt early like car payments or credit cards or your home. If you have little to no debt you have real power over your destiny. No worries about making the next payment, no asking for a loan to go on vacation, you pay real money for what you buy, not inflated with interest.

Credit tends to be mismanaged in our society. People need to learn to live below their means a bit, as masternig that will in fact allow you to eventually live above many people, debt free. I went broke in 1985 and learned the hard way. Today I have recovered and teach people like you for free to manage their income. My sons are learing this lesson from me as they too work to build their own wealth. Both intend to own their homes free and clear within 10 yrs of buying, and I believe they will make it. I have 40 hrs of finance class and more thant 500 hrs total real estate and finance related education. I do not claim to have all the anwers, but I do try to give good answers. This one works without fail.

Best wishes to you!

Answer 2

602 Credit Score

Answer 3

Hi Charles,

You can buy a home at a credit score of 602. But financing a home at a credit score of 602 can be difficult, though not impossible. You need to shop around for a lender who can come up with a mortgage loan offer at your credit score. However, the lender may charge you a higher interest rate since your score isn’t that impressive.

But once you get a loan and you are regular on the payments, I think you will be able to build up a good credit score, and it’s going to help you in future for any kind of credit you may apply for.

If you are in a hurry to get a new home, you may apply for a loan. Or else, just wait for a few months, try to improve your score and then apply for the loan. Surely you will get far better rates of interest when your score improves.

Thanks,

Mortgage Mentor
MortgageFit Community

Answer 4

This Site Might Help You.

RE:
Can you purchase a home with a 602 credit score?

Answer 5

You can but it would be a lot better and cheaper on you to clean up your credit a lot before you do. If you had a 778 score you would pay about 6.5% and could get by with 5% down payment. But with a score of 602 you will pay more like 20% down minum and some where around 8% interest. That is a lot .. But with your score so low would mean you have some collecters after you and you would never get approved with even one bill in collection.

Clean it up first..

Answer 6

Yes, you can if you contact the right lender. We had credit scores around 600 when we purchased our home and we got an 80/20 loan. We borrowed 80% of the purchase price and they then processed an immediate 20% 2nd mortgage. We didn't have to put anything down. The only thing we had to pay was closing costs.

Answer 7

Lender will give you money for sure. Probably charge you a higher interests rate and extra insurance on the loan for not having awesome credit.

Would you consider delaying your plan? Professional investors are careful in choosing each investment that would be near or immediately cash flow positive. With overpriced housing market, that is not possbile.

For example, it costs $500,000 to $550,000 to buy a two bedroom units in Sunnyvale California. Mortgage monthly payment with nothing down is $3500 to $4000 a month with 7% APR. The rent one can collect from such unit would be $2000 a month. Therefore, for each unit you buy, you would lose $1500 a month.

* We assume tax benefits would cancel out with tax and maintenance fee. Please consult your CPA.
**If you have large down payement, the rate may be lowered.

Another important factor to consider, home price may not appreciate as much anymore.


http://money.cnn.com/2006/09/08/real_estate/caught_in_the_bubble/index.htm?postversion=2006090814
http://money.cnn.com/2006/09/05/real_estate/Ofheo_home_prices/index.htm?postversion=2006090514

Answer 8

Yes you can. It will affect your interest rate, upfront points and possibly initial down payment. If prime is 5.5%, with a 600 credit score you should pay around 7% with a point or two up front. Each point is 1 % of the loan (for example 1 point on a 100,000 loan is 1,000 dollars) Yes you can still get a mortgage, but be wary of mortgage companies taking advantage of you. go with a credit union first.

Answer 9

Absolutely you can buy with a 600 score. Not to mention you can do 100% financing as well. Yes your interest rate will be higher than someone with a 700 score but you can buy. I hope this helps you but if you have any further questions or need any help getting prequalified please feel free to email me or visit my website www.dantadgerson.com.

Answer 10

Probably you can do it, as somebody told me, a car goes, but the house is not moving anywhere...
The problem is that they could ask you to get a bigger down payment and higher interest.

Get a mortgage ALWAYS FIXED, NEVER, NEVER get a variable type, I think they are called ARM, you will pay a lot of money in a few years.