495 Beacon

Discussion in 'Credit Talk' started by heather, Jun 8, 2001.

  1. heather

    heather Well-Known Member

    I was lucky enough to get a copy of a credit report a lender had on me, a year and a half ago our beacon was 495. I just figured out what a beacon was not long ago, and now know what all the numbers and things on the report mean.

    In the last 6 months we have gone up and done, from a high of 584 to our new lows of 530. We have many derogs. and inquiries. My question is, how long before I can get my score to a 620 to qualify for a home loan? That is assuming that I can get some incorrect derogs removed from our reports, no more inquires and a car loan that is too new to rate starts reporting as it should. I would like a new house by December/January. Is it possible at all?
  2. sam

    sam Well-Known Member

    very possible . Keep fighting all the credit bureaus or hire junum. Keep your debt ratio as low as humanly possible, don't apply for anything until you are ready to get that house loan.

    #1 thing to do is keep disputing. It took 4 tries for me to rid some of my derogs with equifax. It finally paid off!
  3. tltrader

    tltrader Active Member

    You say "we" in your message. I assume your married. Have you tried pulling separate credit reports for you and your spouse. You may find that one has a higher score than the other. Unless you need to show two incomes to qualify for a mortgage, the higher of the two scores might be sufficient. Also, if you can afford and extra 5% down you might be able to get a "no income verification mortage" for the person with the higher score. Good Luck.
  4. G. Fisher

    G. Fisher Banned

    Where does it say that 620 makes you qualified?
  5. heather

    heather Well-Known Member

    I have contacts, one person I know owns several branches of a large mortgage company. He told me what the minimum requirements were to get a loan through them.

    Yes, it is "we" and our scores are currently running about the same.
  6. G. Fisher

    G. Fisher Banned

    FHA, VA, conventional, or non-conforming? At what down payment?
  7. Squawk1200

    Squawk1200 Well-Known Member

    For Pete's sakes, Fisher, are you honestly asking for information or are you trying to torture this person? Underwriting guidelines for mortgage loan programs, including FICO requirements, are all over the net -- and easily discoverable by someone with as much online experience as you. If you need links ask and I'll give you some.
  8. G. Fisher

    G. Fisher Banned

    Thanks. Yes, please post some about that 620 part.
  9. MiamiBlues

    MiamiBlues Well-Known Member

    According to my mortgage lender the minimum socre to qualify for FHA is 620.

  10. MikeB

    MikeB Banned

    I don't recall FHA using credit scores.
  11. Shantel

    Shantel Well-Known Member

    They must have upped it because when I applied it was 570. And before I'm asked, that's what my mortgage broker told me at 3% down.
  12. Squawk1200

    Squawk1200 Well-Known Member

    Fine -- here are the underwriting guidelines for conforming fixed and 5/1 adjutables from Greenpoint:


    You'll need acrobat reader and you'll need to scroll down to the "Credit Score" section. As you will see, the minimum requirement for a single unit home is 620.
  13. MiamiBlues

    MiamiBlues Well-Known Member

    I couldn't put down 3% because the maximum FHA loan in Broward County, FL is $144,000 and the price of our home is $165,000. As for the 620 it appears to be correct.

  14. G. Fisher

    G. Fisher Banned

    Fine-- http://www.headmort.com/lpm/bbbb100.pdf requires debt/income ratios of 25%/33%. Those types of universal rules have left the scene with Fannie Mae's and Freddie Mac's automated underwriting systems. 40% and higher is common.

    And what is the rate for that loan?

    While 620 may be the case for that particular lender, is it universal? Did somebody in the secondary market lay down that rule?

    Two years ago, Fannie Mae stated that "A borrower with a credit score below 620 is in the neighborhood of two and a half and sometimes three times more likely to default on a mortgage loan than someone with a credit score between 660 and 699."

    They went on to say, "Fannie Mae purchases loans with credit scores below 620. We do not prevent lenders from delivering these loans to us, nor do we make them re-purchase these loans simply because the credit score is below 620. Our mortgage scoring model development data sets, the data sets for the scoring model, include loans with scores below 620, making it possible for our current mortgage scoring models that we use in Desktop Underwriter to accommodate these loans and accurately assess their risk."

    "Desktop Underwriter will underwrite and approve loans with scores below 620 and does so. In our letters to lenders on credit scoring, we have provided specific examples of situations in which it would be acceptable to sell us loans with credit scores below 620."


    How many other pages like those two from Greenpoint can you come up with?
  15. Squawk1200

    Squawk1200 Well-Known Member

    I find it amusing that in three sentences you talk about automatic underwriting and then ask what the rates for these loan programs is. One of the features of at least some automatic underwriting programs is risk-based pricing. See, e.g., http://www.gmacwholesale.com/documents/docs/BrokerRateSheet.PDF (showing different rates for three levels of "Expanded Approval" thru desktop underwriting)

    That having been said, Greenpoint's current whloesale rates are available on another .pdf file at that site. Expect to pay about a point worth of fees to the broker or lender in addition to the wholesale rate.

    As for other lenders, I can assure you that FICO score cut-offs are alive and well throughout the mortgage industry. For example, one of GMAC's mortgage units has a minimum 680 score for conforming loans, although it will go as low as 580 for full-doc 90% LTV loans at higher rates. See http://www.gmacwholesale.com/documents/gmacdocs/productmatrix/correspondents/Non-Traditional/Sol.PDF. But, since you asked specifically about 620 minimums:

    http://www.firstsecurityfunding.com/purchase.html (Programs w/min 620 scores)

    http://www.loans2000.com/banking/matrix.pdf ("A" credit program full-doc requires min 620 score)

    http://www.barbellafunding.com/secure/ratesheet.pdf(min. 620 FICO for 97% LTC product).

    Bottom line, it is certainly possible that our original poster "needs" a 620 score depending on her circumstances. Maybe she need a specific program, like 97% or 100% LTV financing, or maybe she just can't afford rates higher than those available to 620+ folks in her price range.
  16. Shantel

    Shantel Well-Known Member

    I think the bottom line is Heather, just because you reach a 620 (if that's what you were told at some point), there are other factors that may prevent you from obtaining a mortgage (i.e. debt-to-income ratios, and yes even deliquencies). With age, just because your score gets to 620 and you still have negative info on your credit report, doesn't mean you'll be able to get a mortgage.

    You should focus on doing something about those negatives and keeping your debt-to-income ratio low. This way, you will qualify for the mortgage with the "good" rates and not sub-prime lending.

    Also, did anyone tell you how much you would have to put down? Where you planning on putting anything down?

    This is not to discourage you because you've come a long way, but you still have far to go and I don't think anyone can guess how long it will take for you to reach 620.

    If you start trying to remove those negatives, you might be to 620 and beyond in a few months. But you have to do this with EACH CR because they throw out your high and low credit scores and use the middle score as your "true" score.

    To be on the safe side, I'd give myself a year.
  17. MikeB

    MikeB Banned

    I like these statistics by some bean counter that says people with credit scores below 620 "are X times more likely to default on a loan". I guess the "innocent until proven guilty" premise doesn't apply to loans, insurance, etc.

    Again, I think the 620 is an underwriter requirement, not FHA mandatory requirement. I have had a few mortgage brokers tell me that you can get approved with scores in the 500s as long as you have no recent derogs in 1-2 years. But, if you don't have any derogs in the last 2 years, you would likely have a score around 620, excluding inquiries and such.
  18. MikeB

    MikeB Banned

    G. Fisher, Thanks for posting that FTC script. There is very good information in there. I even found someone who mentioned the "innocent until proven guilty" premise that I stated in my last post. Funny.
    Anyway, that script really shows how screwed up the whole credit scoring system is. A good read indeed.
  19. G. Fisher

    G. Fisher Banned

    I find all your posts amusing, 1200 (if I had your last name, I'd use just that, as you did mine). But that's just cheap rhetoric.

    Why didn't you just give the address to Greenpoint's rates? Is this the correct page:

    http://www.headmort.com/ratesheet/wholesale/1rt.pdf ?

    And, are my eyes deceving me, or does that say Cr Sc < 620, 1.00 point? So, 620 isn't the minimum?
  20. Squawk1200

    Squawk1200 Well-Known Member

    620 is the minimum for the bbbb-100 program. THe BGGX-05 program (http://www.headmort.com/lpm/bbgx05.pdf, since you like links so much) is electronically underwritten and has no minimum FICO score requirement.

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