How good does one's credit need to be to qualify for a home loan with a decent percentage rate?

Question

My fiance declared bankruptcy about 4 years ago, and I have had been enrolled in a credit counseling service to pay off personal debt (I will be finished paying it off this year). Both of our credit scores are slightly under 670. We want to start looking for a home in about a year, and will be able to put down about 20%, but we are concerned about getting approved for a mortgage. Anyone who can share any knowledge about this would be appreciated!

Answer 1

First thing: Most mortgage companies will treat your credit counseling the same as if you're in a Ch. 13 bankruptcy. They'll want you to be done with it for 12 months before you can buy. So anything you can do to pay it off quickly will help cut down that timeframe.

You could be good candidates for FHA loans though, even now. But with a 20% downpayment, in a year, there's absolutely no reason you shouldn't qualify for the best conventional rates and programs available.

Answer 2

The Average credit score in America is about 680-685...If your credit hurts a bit, you more than likely would be considered a subprime borrowor which makes rates a bit higher based on your history...Although, you can have the worst credit in the world and get 100% Financing with no down payment and still come out with a fair rate (5.5-7%)...Lenders compete for business so the industry to about the same across the board...I hope this info was useful!

Best Regards,

FinanceYourWay.com

Answer 3

I got a 100% loan no money down about 6 months ago. My credit score was 640. I had no problems. My rate is higher than u may want @ 7%. But I'm happy because I know people who have 11%. I can't imagine you wouldnt get a loan.

Answer 4

You can comparison-shop right now and see what you get. Try the website below