We want to buy a house this year. We plan on getting off bad credit as possible and paying off the rest. But I still think the credit scores will not be that hot. I am expecting to have to pay 2 judgements and a few collections. Has anyone got an FHA loan with a credit score less then 600. I am betting we can't get it above 600, but I could be wrong. Please let me know!
I think that 620 is cut off. The only reason I say this is we had a 609 and they said we had to get to 620 to get the loan. That may have been the cut off with my lender though.
Some of the info I've heard was 620. You might be able to get a loan with a lower score, but would need more down and they'll try to hit you with a higher rate. My advice (And I too am in the home market). Check out the letters here, see what you can dispute/get removed, then try again in a couple of months. I'm targeting April... GT
Well I'm with Lexington but I need to get out of it. I hadthem fax me all the letters that they sent to the creditors for validation that did not reply since October 25, 2001. Just yesterday I sent the copies to the local branch CRAs telling them that they need to remove them or I am taking legal action. I hope it works!
I had investigated FHA loans and I was told that the score isn't really what they look at, it's whether or not all collections and judgements and stuff have been paid off. They even told me that some of that stuff could be rolled into the loan and paid off at closing but explanation letters had to be written on each bad account as to why it went bad. That was last year though. Has anyone else been told this too?
"FHA and VA loans do not have a credit score requirement... " - Mortgage Bankers Association of St. Louis http://www.mbastl.com/html/faqs.html
While I do see that they do not require a certain score, the fact is that the company you are obtaining the laon from probaly does. Like I said I had a 620 and looked at my options. The interest rates were averaging around 7% then and my lowest offer was 9%. The highest was I believe 11.4. Obviosly, I have since refinanced. Hope that helps. Also, there was a discussion here not long ago regarding this. Do a search for C credit.
Check out naca.org--they are a not for profit--I think the loans are conventional, but not score driven. I think you have to live in an area where they have an office. Hope this helps. cariba
I have a FHA loan and my scores were not an issue. The details on your report are very important. If you have any unpaid items they must be current for at least the past 24 months and all goverment obligations must be current (student loans, etc) or paid (tax liens, etc). I was required to explain in writing all negative tradelines on my profiles. I had a tax lien and payment in full was mandatory to close the loan. If you are a first time home buyer, there also may be similar state or county programs that follow similar criteria for approval. The state of California (CHFA) and various California counties have first time home buyer programs and the interest rate is slightly lower. KK
I too received a FHA loan with my score about 550. The loan broker asked me why my score was low and I told him of my errors. He asked for proof of the errors and proof of accounts being paid off and closed. After that, I was ok. I did have a 2% buydown loan to get me to 7%. FHA loans in general are a point or two above conventional loans. I did not have to put anything extra down. All loans, FHA or anything, are at the mercy of that particular loan broker and financial institution. Catch someone in a bad mood, or someone who doesnt want to be bothered and forget it. But if they want to make the loan, they will work with you. You may have to wait a bit and clear up your credit. Good Luck, Mike G.
