is a credit score of 516 to low to get a home loan?

Answer 1

There are lenders that will loan money to just about anyone for just about anything, especially if it is backed with collateral (the house in this case.) Just be prepared to have a very high interest rate.

Before you start looking for a home loan, you should probably work on getting your score up. Bring everything current and pay off as much as you can. Get rid of extra credit cards, keeping only a two or three with limits to match your income.

Answer 2

While applying for a mortgage loan, your FICO score plays an important role in deciding whether you are approved for the loan or not. Here are some tips that will tell you what to anticipate from mortgage lenders. For a credit score less than 585, you have to make a down payment of at least 10-20% on the home. You will find it difficult to get 100% financing at this stage.

For a credit score in the range of 585-599, you may have to make a down payment of nearly 5% to be approved for a home mortgage loan. Even in this case, your approval will come from a subprime mortgage lender. You have to approach a lender who deals exclusively in loans for people with not so perfect credit or in situations that cause difficulties in getting a mortgage.

If your credit score lies between 600 – 620, you might be easily approved for 100% financing. Even in this case, you have to approach a subprime lender.

For a credit score of at least 620, you can easily avail of 100% financing, along with a reduced rate of only 1 - 2 percentage points more than the prime rate.

Answer 3

540 is usually the very lowest that an honest lender will work with, and that is if they are applying with a spouse that has good credit at the same time. Spend some time saving money and preparing for the expenditure (1-2 years) in this time your score can go up, and you can save a bit to help out the expense- having a down payment would help a lot.

Answer 4

Most good lenders want 720 and up scores. Lower scores can get financed, but the high interest rates will add big bucks to the house payment. You're probably better off working on the credit a little bit so you can get more house for less money. If you're making a huge payment in living in a dump, what's the point?

Answer 5

I agree that you COULD get a loan (with a very high interest rate). I would hold off until your score goes up. It seems, with that score, that you may have some bad spending habits. You may want to straighten out those problems before you commit to buying a house.
Foreclosures are up just about everywhere.

Answer 6

No, I have a friend who does financing, he can work with a 500, score, as long as the person is working.

Answer 7

probably....
FHA or HUD might be willing...
what is your debt ratio? (debt / net income)
is it at or less than 0.20?
your home can be no more than 0.30 (monthly expense / net income)
COMBINED they can be no more than 0.50 (home & other debts / income)


If they decline you, set up a SERIOUS home budget and stick to it for a year.
Also, for a year, focus on paying ALL of your bills ON TIME.
Get a SECURED credit card. Use it for gas. groceries, etc. DO NOT EVER let its balance get to be more than 1/2 of its credit limit. Then, PAY IT OFF every month.
Include in your budget paying off any old debts (dr bills, etc) you have.
Contest ANYTHING on your credit report youthink is inaccurate AND submit explainations for negative items.

Answer 8

For most places yes. there are a few places however that will. It really depends on what is on your credit.

Answer 9

for 100%, it would be very tough. You would have to have not alot of items in collection (if any)

Answer 10

Yes.