725 FICO = C credit????

My guess is because this is a subprime lender they don't do prime loans. Try another lender and see what they can do for you.

 

With that score you should have no problem re-financing. Try another lender. I know people with scores lower than yours that had no problem re-financing. 725 is very good

 

According to my Broker.....620 and above is considered A paper even with BK around 4 yrs old (3 with some lenders, 5 with others).

Someone is telling your wrong.

Is it a sub-prime lender? If so, they probably have a floor rate they cannot go beneath and they are pulling your leg to get some commision.

I have recently gone throught the process and I can tell you that with an average score of 645 or so and a 3.5 yr BK I was approved A paper for the lowest published rate.

A good broker can probably do even better than that.

The problem you might run into is that your first mortgage, especially with a rate like that, is most likely going to have a pre-pay penalty of 3-5 years. Although, with rates like they are, and depending on your income, you might be better off refinancing anyway.....

Call around, talk to a few different people. DON'T let them pull your credit, you don't want the inquiries until you pick one. You know your score and your income/debt, that's all they need to quote.

Good luck!

Shawn

 

anesthesia,

When I got my house earlier this year, my average fico was in the 620s and I have a large student loan debt as well. For one thing, if your loans were in deferrment and were going to be there for at least a year from your closing, they shouldn't have been calculated in your income/debt ratio. Secondly, I placed my loans in forbearance and started paying a lower payment to get my income debt ratio lower. For example, you can request that your student loan payment be lowered from 400 a month to 75 a month and the lender will count the 75 as your monthly payment. Now, if you want to pay the regular 400 just to keep paying down the debt, that's fine, but what's on paper for the underwriters is the 75 dollars. Another thing, don't assume your lender always knows what he or she is talking about. Many moons ago, I was a credit investigator for equifax's mortgage reporting service and we would have to explain to lenders what an r1, 01, or i1 was. They assumed a 1 was bad! You need to shop around, because that C paper with a 725 score is bs and I'm not kidding. I'm ticked just reading your post, because obviously this lender is just out to make money. please PLEase PLEASE go to another lender. Do you have an FHA loan? If so, you are eligible for their streamline program which requires no money, closing costs, or a lot of paperwork. When I got my mortgage in february, my rate was 7.25 which was good, but I just refinanced for 6.875 and all I paid was my first payment because you don't skip a month with the streamline program. I was going to have to pay mortgage anyway, so it didn't cost me a thing, plus it's saving me 60 bucks a month and several thousands of dollars over the life of my loan. Good luck!

 

With FICOs in July this year of 628, 628, and 650 got approved in Oct. for conventional loan $1K down, 7% with no points. $81k in student loan debt, $3k in credit cards.

I agree with the others--shop around!

cariba

 

Suerpshawn,

Would you please provide me with info of the broker you mentioned? Thanks. My email is on.

 

You have just experienced the Fico pricing rip off price gouge!

 

With 2 years of good credit, you will qualify for FHA at conventional rates. There are millions of banks and mortgage brokers out there. It's time to shop around.

 

I don't think this is the FICO pricing rip off gouge. 725 is enough score to be A paper. The rip off is an unethical company taking advantage of a good credit risk. They would do this without FICO or with FICO.

 

sorta like The platinum folks that apply for crap 1 and get a $200 line gold card. For every sucker born... ya know? it pays to shop hard..

 

I agree.

 

According to Fair, Isaac, 50% of the population has a score higher than yours.

http://www.myfico.com/myfico/ScorePowerSample.asp

Fair, Isaac says a "high" score is in the mid-700s or higher.

http://www.myfico.com/MyFICO/CreditCentral/ScoreInterpreting.htm

 

I want to know who these people are with scores higher than 725. Because I'm sure not one of them. Anybody on the board? If you do have a higher score what kind of accounts do you have because I want to know what I'm doing wrong.

Dani

 

I personally do not have high scores but my father does, upper 800's. Since his first credit card, many moons ago, he has never paid anything late. He has 3 cards, all of them with crazy limits (1 for sure is $25000) he only keeps a small balance on one of them (one of those miles cards) and charges stupid little things with the others and pays them off every month.
He has had probably 4 diff. car loans in the past 7 years and he has always paid them off after the 3 year mark.(usually a five year loan).
Hopefully this can help you a little bit.
Kellie

 

Thanks, KHM. It gives me a good idea where to start.

Dani

 

Ok...sorry for the delay...haven't been around lately.

I will give you all their contact info if you email me...don't want to put a shameless plug on the site.

They (they are a couple) are great to deal with and will really work with you.

Shawn

 

Have a look at the content on http://www.bayhouse.com

What's-her-name may be a little nutty but her advice is good. I had a 751 FICO (Equifax) the last time I checked, and this site deserves some of the credit.

RM

 

This is a general guide to what is called "A-B-C-D" credit. These grades are typical of the requirements used by many lenders, but are not absolute grades. Individual lenders typically have similar but somewhat different specifications. Keep in mind that late payments, called "lates", are generally tracked within the previous 12-month period.

A credit
Considered the best credit rating. FICO scores are generally 640 and up with no lates on mortgage and no more than one 30-days-late on revolving or installment credit. No bankruptcy within past 2-10 years. Maximum debt ratio is 36-40% while maximum loan-to-value ratio is 95-100%. This type of credit will demand the best interest rate available!


B+ to B-
General good credit with FICO scores from 590 - 629. Two or three 30-days-late on mortgage and two to four 30-days-late on revolving or installment credit. Cannot have any 60 day lates. Must be 2-4 years since bankruptcy discharge. Maximum debt ratio averages 45-50% while maximum loan-to-value ratio is 90-95%. This type of credit will obtain rates 1-2% higher than current market rate.


C+ to C-
Fair credit with FICO scores from 570-580. Three to four 30-days-late on mortgage are allowed. Installment or revolving credit can have four to six 30-days-late or two to four 60-days-late. Must have 1-2 years since bankruptcy discharge. Maximum debt ratio runs around 55% with maximum loan-to-value ratio averaging 80-90%. This type of credit will generate rates 3-4% higher than current market.


D+ to D-
Overall poor credit history with FICO scores from 570 and lower. Two to six 30-days-late on mortgage or one to two 60-days-late, with isolated 90 days late. Revolving and installment lates show poor payment record with pattern of late payments. Possible current bankruptcy or foreclosure allowed with all unpaid judgments to be paid with loan proceeds. Must have stable employment. Maximum debt ratio averages 60% with max loan-to-value of 70-80%. This type of credit will result in high interest rates (12-14%), but borrower can always refinance after one year of "on-time" mortgage payments to bring rate down.

Please keep in mind these are "general" guidelines. Some lenders assign different grades or use different grade definitions based upon their own method of evaluation.

 

This post clearly points out that FICO is primarily a pricing mechanism.