U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 1.5 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Jump to a detailed profile or search
site with Google Custom Search

Search Forums  (Advanced)
Business Search - 14 Million verified businesses
Search for:  near: 
Closed Thread Start New Thread
 
Old 02-16-2013, 08:50 AM
 
1 posts, read 73,363 times
Reputation: 38
Default Minimum Credit Score To Buy A Home

Feb 16, 2013

FHA changed the minimum credit scores for new borrowers:

New borrowers will now be required to have a minimum credit score of 580 to qualify for FHA's 3.5% down payment program.

New borrowers with less than a 580 credit score will be required to put down at least 10%. The minimum credit score for an FHA loan is 530.

This change went into effect in 2010. This allowed the FHA to better balance its risk and continue to provide financing for home ownership.

fha-world.com or Call us 888.958.4228

 
Old 02-16-2013, 01:43 PM
 
2,334 posts, read 2,803,406 times
Reputation: 2422
The prevailing FHA credit score for actual banks is 640. If you have less than a 640, a Bank will have to partner with a more obscure lender, the loan will take longer, require more documentation, and be more expensive in the areas of rate and fees.

But usually, if you have around a 580, and no recent foreclosures/Bankruptcies, a good Lender will work with you to optimize your credit scores so that you can qualify for prevailing FHA terms with a 640+.
 
Old 02-16-2013, 03:01 PM
 
1,092 posts, read 1,133,545 times
Reputation: 1059
If someone does not file bankruptcy but simply allows bad debt and collections (out of statute of limitations) to age off, would they be required to pay these before qualifying? For example--Five+ year old debt, but not yet obsolete for the Credit Report. TY!
 
Old 02-16-2013, 03:19 PM
 
Location: Brewster
1,421 posts, read 1,001,694 times
Reputation: 2415
I was at a meeting/class for real estate agents the other day and a mortgage writer present said his lender likes a score of 740 to reap the best rates. I thought this sounded like a big score. He also said that some people simply cannot buy a house and shouldn't.
Of course any time you put money down your chance of getting a mortgage goes up, the more the better and maybe you can still get a decent rate as well.
My thoughts: talk with a pro and see if you can get a loan and just how much you qualify for.
 
Old 02-16-2013, 03:52 PM
 
2,334 posts, read 2,803,406 times
Reputation: 2422
740 is a great score for Conventional Lending. FHA is less fico-sensitive, ie., you can have a 640 and get a great FHA rate.

Regarding aged collections - that was part of the Good Old Days. These days, you have to pay down/off ALL collections until the TOTAL dollar amount of all outstanding collections is less than $1000.
 
Old 02-16-2013, 06:39 PM
 
Location: MID ATLANTIC
3,876 posts, read 8,028,364 times
Reputation: 2849
WOAH, hold on, there's some incorrect information here.......it's the majority of the secondary mortgage market that imposes the 640 credit score. There are a couple of correspondent lenders (lenders that lend to other banks) out there that will accept down to 620, provided that lender sends them volume business. Any lender that delivers directly to the secondary GSE's can go down into the 580's, as long as they meed HUDs specified guidelines.

So if you hear of someone saying "we do to 585" on an FHA - there's a very good chance they aren't serving kool aid. However, those loans will be the most difficult loans to get through underwriting. But these lenders can do the loans that make sense, the loans that cannot get an automated approval and require manual underwriting. An instance where this would make sense is a father/son junior/III mix up on the credit report and dad's score is trashed thanks to junior. Dad gets letters from the creditors that state those are not his accounts and the file should be good to go. (The bureaus will not do rescores on identity issues on a credit report). Or, you have someone that can pay cash 3x for the house, but they are putting 10% down, but they have one or two accounts dragging their score down.

There are many legitimate reasons for scores lower than where they should be and there are places for these folks to get a loan. Just be ready for a long, exhausting ordeal and a rate to match the risk (not subprime financing).
 
Old 02-18-2013, 07:47 AM
 
6,196 posts, read 3,948,618 times
Reputation: 4713
Ok,I have a score of 670.
So instead of paying down my credit cards and car loans to 0(I had no collectins,just high rbalances) I could have just saved the money for a down payment. My score was 620.
Now I am having a hard time qualifying for a mortgage because I have no savings,no assets,no 401k. So I just should have kept the $8000 I spent on debt and saved for the down paymenyt?

Also,what's that number in the OP?
 
Old 02-18-2013, 09:52 AM
 
1,573 posts, read 1,229,576 times
Reputation: 860
Quote:
Originally Posted by jerseygal4u View Post
Ok,I have a score of 670.
So instead of paying down my credit cards and car loans to 0(I had no collectins,just high rbalances) I could have just saved the money for a down payment. My score was 620.
Now I am having a hard time qualifying for a mortgage because I have no savings,no assets,no 401k. So I just should have kept the $8000 I spent on debt and saved for the down paymenyt?

Also,what's that number in the OP?
Would you really want to have been paying a bunch of credit card interest while taking on a mortgage w/ a sub-optimal interest rate (and probable PMI)? I think it was wiser to have paid down CC debt. Just wait and save it back up.

Does car insurance really cost $424 a month for a single car in New Jersey??? That seems crazy.
 
Old 02-18-2013, 10:00 AM
 
6,196 posts, read 3,948,618 times
Reputation: 4713
Quote:
Originally Posted by snowdenscold View Post
Would you really want to have been paying a bunch of credit card interest while taking on a mortgage w/ a sub-optimal interest rate (and probable PMI)? I think it was wiser to have paid down CC debt. Just wait and save it back up.

Does car insurance really cost $424 a month for a single car in New Jersey??? That seems crazy.
I was talking to a mortgage lender 2.weeks ago,and they said with a score of 620 to try another lender,because that score isn't too low. The mortgage lender specialized in getting mortgages for low credit scores,but he wanted scores below 600.

I didn't realize when your scroe is that low you have to pay higher interest fees?
 
Old 02-18-2013, 01:39 PM
 
1,092 posts, read 1,133,545 times
Reputation: 1059
Quote:
Originally Posted by snowdenscold View Post
Would you really want to have been paying a bunch of credit card interest while taking on a mortgage w/ a sub-optimal interest rate (and probable PMI)? I think it was wiser to have paid down CC debt. Just wait and save it back up.

Does car insurance really cost $424 a month for a single car in New Jersey??? That seems crazy.
Depends on the car, age of driver and the driving record. I'm guessing very expensive car or a significant issue like a DUI. Or the OP could be getting a bum deal. Always a good idea to check rates.

My son is driving a luxury vehicle (don't even ask!) that is a few years old, is 22, and his insurance is only about $120 per month through one of the top tier insurance companies.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Closed Thread


Over $84,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

2005-2014, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 - Top