ok here it is. my husbend and i are planning o purchasing a home soon, very soon, and wondering how good of a credit score we would need. I declared chapter 7 bankruptcy a year ago. His score is a 550 and mine is 534. So those are a little low, but we are trying to get this one house for 99,000. we have maybe 2,000 to put down. does anyone know who can help???
2007-01-30 01:22:01 · 9 answers · asked by stacydeets 2 in Business & Finance ➔ Renting & Real Estate
I'm a mortgage loan officer, working for a broker rather than a bank. A broker (vs. a bank) would be the best source for a loan that would fit your needs. I personally have handled a purchase loan for a borrower with a credit score of 520 and a refinance for a borrower with a credit score as low as 503.
So it's very possible that you can get a loan with your credit score. Keep in mind as someone else answered lenders will pull credit reports from all three credit reporting bureaus and will base your loan on your middle credit score.
The loan type you'll be receiving is called a Sub-Prime loan, and because of falling into a higher risk category you will of course be offered a higher interest rate.
2007-01-30 08:15:14 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Make sure those credit scores are midscores. If so, there are a couple of banks out there that will finance you 100% at 550. It's just the rate won't be pretty. Companies that provide mortgage insurance will no longer provide it for people with credit scores below 575 and more than 95% financing, so conforming/FHA/VA is out. You're going to have to get your mortgage from the subprime market, and in that case, prepare to pay through the nose.
2007-01-30 03:17:56 · answer #2 · answered by togashiyokuni2001 6 · 0⤊ 0⤋
Your credit scores are VERY low. You will probably pay a much higher interest rate because of this (costing you much more over the long run). As long as you purchase a house that you can truly afford (not just what the bank says they're willing to loan you), you can start rebuilding your history. Instead of paying off a $97,000 or so loan over 30 years, considering adding additional money to each monthly payment or add an extra payment per year...this will exponentially speed up the time it takes to pay off your house and will dramatically decrease the amount of your money that the bank gets in interest over the years. Read your contract carefully and talk to a professional (unaffiliated with your bank) to confirm that you wont get penalized for prepayment. Then work on paying all your other bills on time because this will increase your credit score and save you tons of money in interest and late fees throughout your life. Good luck! (Also, check out DaveRamsey.com or feel free to e-mail me for more help or insight)
2007-01-30 01:57:42 · answer #3 · answered by CSUflyer 3 · 0⤊ 0⤋
First off, a mortgage banker or broker will pull your tri-merged credit report and will take your middle score. Your 534 may not be your middle score -- it could be your highest. If that's the case, I suspect you will have a very difficult time obtaining a mortgage you can afford.
Generally, traditional banks will not lend to anyone with a score lower than 550. You MAY be able to go FHA.
I would go to your bank, talk with a lender. You'll have some explaining to do with the underwriters, but they may be able to get you a commitment letter in a week or so.
Good luck.
2007-01-30 02:26:57 · answer #4 · answered by cardinalboy97 3 · 0⤊ 0⤋
Why do you think lenders are apprehensive to give loans to people with your credit scores? It's because time and time again, those loans go into default. Actually, at your credit score, the default rate tops 80%. All of those people went into the mortgage thinking they could repay, but 4 out of 5 wound up not being able to pay. Lenders declining your application is as much to save you as to save the lender.
You need to take this to heart. Your chances of being successful if you purchase the home are slim to none. You will be putting yourself into a much worse financial situation if you go through with this home purchase. Not to mention that you will be locking yourself into a high interest loan in the sub-prime market, which will be difficult to climb out of.
You need to be patient. Take time Rebuild your credit. Then purchase the home. Purchasing a home now is an impulsive move on your part - today you think purchasing this home is a good idea - as opposed to a long-term well thought out endeavor - goal: good credit and home ownership; plan: step one build up credit score, step two save money, step three purchase home.
Thinking it through, which is what people who don't wind up in credit trouble do, will lead you to the conclusion that the waiting another year or two would be best.
2007-01-30 02:34:53 · answer #5 · answered by CJKatl 4 · 0⤊ 0⤋
My husband is a loan officer for a mortgage company that specializes in low credit scores that are at least 500. If you would like his contact information feel free to email me.
2007-01-30 04:22:39 · answer #6 · answered by Anonymous · 0⤊ 0⤋
With those scores and a low down payment, the only option I can see if FHA or VA. On other programs, you'll probably need at least a 580 score.
2007-01-30 02:38:54 · answer #7 · answered by Anonymous · 0⤊ 0⤋
This is a tough one; I know a loan officer who can do 97% LTV on an FHA loan if I am not mistaken. It also depends on the home value as well. If it appraises around 110,000 , you could likely do 90% LTV loan fairly easily. For more info, fill out the free evaluation form at
www.totaldebtsolutionsllc.com
and they will have a loan officer contact you.
2007-01-30 11:17:13 · answer #8 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋
If any of you are Veterans, use your VA loan. If not, find a mortgage company in your area by word of mouth that works with people. Currently old houses are selling too slow in the market, realtors and mortgage companies are working better deals. Now is the time, good luck.
2007-01-30 01:32:36 · answer #9 · answered by Anonymous · 0⤊ 1⤋