Mortgage with 609 credit score???? (rental, mortgage broker, credit card)

[wtbu]

We have been searching for a house to rent south of indy and are finding this to be quite difficult. Throughout our research though we learned that purchasing a house may not be out of the question for us. My husband has a credit score of 609, most items on his credit are medical, the others are small and can now be taken care of.

I'm having trouble figuring out where to start this process. Should we go with a large, well known, reputable company? Do we only qualify for sub-prime lenders?

Does anyone know of a good mortgage company that works with people who have his credit score??

Any help would be very much appreciated!!

[grmasterb]

Originally Posted by wtbu

We have been searching for a house to rent south of indy and are finding this to be quite difficult. Throughout our research though we learned that purchasing a house may not be out of the question for us. My husband has a credit score of 609, most items on his credit are medical, the others are small and can now be taken care of.

I'm having trouble figuring out where to start this process. Should we go with a large, well known, reputable company? Do we only qualify for sub-prime lenders?

Does anyone know of a good mortgage company that works with people who have his credit score??

Any help would be very much appreciated!!

The first place I would go to is my bank. With that kind of credit score, an FHA loan may not be out of the question, but it could be a challenge. Most banks are approved FHA lenders.

[msamhunter]

Originally Posted by grmasterb

The first place I would go to is my bank. With that kind of credit score, an FHA loan may not be out of the question, but it could be a challenge. Most banks are approved FHA lenders.

A bank will more than likely turn you down in today's economy as they now want 750 for a home. Some things you can do is try to a: do an FHA auction where you can get a home for a lot cheaper. The smaller amount needed might be good enough for a bank. Second, go through a home builder like Pulte. They do not finance mortgages but they can help you and see what you will need to do in order to qualify for a home loan. Home Builders tend to go through reputable mortgage companies.

[Toxic Toast]

Metlife will work with you if you are near the 620 mark. I would do whatever is needed to improve that number though.

[grmasterb]

Originally Posted by msamhunter

A bank will more than likely turn you down in today's economy as they now want 750 for a home.

Not for FHA loans. Different credit standards than conventional loans.

[sunnyandcloudydays]

Originally Posted by wtbu

We have been searching for a house to rent south of indy and are finding this to be quite difficult. Throughout our research though we learned that purchasing a house may not be out of the question for us. My husband has a credit score of 609, most items on his credit are medical, the others are small and can now be taken care of.

I'm having trouble figuring out where to start this process. Should we go with a large, well known, reputable company? Do we only qualify for sub-prime lenders?

Does anyone know of a good mortgage company that works with people who have his credit score??

Any help would be very much appreciated!!

Sub- Prime lending is not available anymore.
You may want to wait until your credit scores improve or else your simply going to pull your hair and fingernails out of your body

[sheena12]

An FHA mortgage might not be impossible. You can kick your score up a bit if you make sure that you do not have over 50% outstanding on any credit card.

With FHA you must be a first time buyer or have not owned a home in several years. The house also has to meet FHA standards and they are very conservative about your debt to income ratio, and the cost of the house vs. your income.

Any mortgage broker will be able to tell you other ways to improve your credit score.

There are no actual "subprimes" but there are private investors or "hard money lenders"
I would be VERY cautious!

There are also owner financed homes all over the US.
Just Google "Owner Will Carry" and something will come up in your state.

It might not be your dream house, but it's a pathway to home ownership and your money is not going down the drain.

Best of luck!

[sunnyandcloudydays]

FHA loans have a different criteria
the last i knew a 620 score is minimum
you dont have to be a first time home owner to utilize fha backed mortgages

I would work with a banker or a broker and not a lender
the reason a bank is going to follow only their guideline (period)
a broker/banker can use several outlets and can eaily walk you thru the process.
an fha loan is assigned a case number and a broker banker will be able to transfer that number if needed with your authorization


example lender a. turns down the loan for unknown reason. lender b. guideline is different
lender a. would have to transfer the case number to lender b.

same case number stays with you thru the process of your purchase.
but the broker or banker has more outlets and more chances to get your loan file complete.

You need to keep in mind just because its an fha loan different banks and different investors are still going to adhere to their own set of internal guidelines

generally speaking you must have
on time rental payments with a track record of payments
any med collections that are substantial cant be on your credit file, generally speaking anything over 2k is substantial
a bk must be seasoned for a period of 2 years with no mishaps

credit in general must be current
fha looks into your reserves - minimum of cash on hand for emerg. generally speakng two months of income either in a bank acct that is seasoned (not new)
or money in a 401k or other investment like an ira or a cd.

job time must be favorable with no large gaps in employment
your income must -
They will look hard at your income w2 income with paystubs if your self employed.
You must show a postive income minimum 2 years and you must have a debt to income ratio within guidelines and again it must be verified with complete tax returns and all schedules.

Not impossible but will take some work on your behalf as well
unless your have large chunks of money to throw down on a purchase
forget the hard money lenders as they typicall only lend on a max of 60% of your value they also may have minimum loan amts.

[grmasterb]

Originally Posted by sunnyandcloudydays

FHA loans have a different criteria
the last i knew a 620 score is minimum
you dont have to be a first time home owner to utilize fha backed mortgages

I would work with a banker or a broker and not a lender
the reason a bank is going to follow only their guideline (period)
a broker/banker can use several outlets and can eaily walk you thru the process.
an fha loan is assigned a case number and a broker banker will be able to transfer that number if needed with your authorization

In my experience, banks rarely hold FHA mortgages in portfolio. They are often sold, service-released, to other banks who securitize them. So, the underwriting standards are driven by the secondary market and are not static.

[sunnyandcloudydays]

Originally Posted by grmasterb

In my experience, banks rarely hold FHA mortgages in portfolio. They are often sold, service-released, to other banks who securitize them. So, the underwriting standards are driven by the secondary market and are not static.

That is my understanding as well
I believe this is why you see such tight lending @ a traditional bank
They probably want to get the premium and released from their portfolio asap.

less exposure = less risk.


but if you have a pool of fha loans with scores of 600's
vs a pool of 700 scores

it would stand to reason the 700 scores would perform much better than the lower scores.

I know they bundle these together in groups and get a higher service release for the higher performing loans.

and of course this is why you see such disparity even in the underwriting of an FHA loan.