At FICO Score of 630, can I get mortgage or improve score?

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Bill S

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Post Posted: Thu Feb 02, 2006 12:06 pm    Post subject: At FICO Score of 630, can I get mortgage or improve score?
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My FICO score is 630. I have credit card debt of 70K. Mine used to be 690 couple months ago(50k debt). I had to take money for personal investment(95% of credit line used).

I was thinking of buying an house(340k). What would you guys suggest? Will I get a mortgage with this score?

Wait until my score improves? I was thinking of paying off 90% of debt in 3-4 months.

Thanks

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Icon Mini Profile Samantha
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Post Posted: Thu Feb 02, 2006 12:19 pm    Post subject:
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Hi Bill,

Welcome to MortgageFit Forums.

Is it a primary requirement for you to buy a home now? If you don't require it in a hurry, then I shall suggest you to go for a home loan after there is some improvement in your score.

With a score of 630 you will definitely qualify for a mortgage but the rate will not be as low as you would like.

It's a nice decision to pay off your major portion of your debt within the next 3 - 4 months.

At least you can think of going for the home loan after that. In the mean time your score will improve as you make the payments.

But it depends on your requirement. If home requirement is not an emergency then it's better to wait and get a lower rate.

God bless you.

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Post Posted: Thu Feb 02, 2006 12:28 pm    Post subject:
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Hi Bill,

You won't be able to qualify for the best rates with a score of 630 but you can get standardized rate or a prime rate.

You can check with different lenders the rate and the program that you may qualify and see if you can afford with your income and savings. The benchmark of credit score is different with different lenders and depends on the amount of risk that they are prepared to accept.

If the payment amount is not attractive to you, then you should wait for sometime and try to improve your score to get a lower rate.

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Bill S

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Post Posted: Thu Feb 02, 2006 12:38 pm    Post subject: Thank you for your help
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I am surprised to get a response this quick. I will pay off the credit card debt first. I used to pay 300 for interest only with great balance transfer offers. Now it is getting into 600 with expired offers. It is making me nervous. I will pay off my debt and think about any new financial endeavour.
Angel

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Post Posted: Thu Feb 02, 2006 12:39 pm    Post subject:
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In U.S. you can qualify for a mortgage with a score of 630, but I doubt whether you will get a prime rate. Rolling Eyes
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Rhonda

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Post Posted: Thu Feb 02, 2006 12:42 pm    Post subject:
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I shall suggest you to try for a score of 660 at least to get a better rate.
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Post Posted: Thu Feb 02, 2006 12:48 pm    Post subject:
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680 can be a good score to get the most competitive rates although there are several competitive mortgage programs which allows you to qualify for a mortgage with a score 630.

It largely depends on the type of mortgage program that you choose along with some other points like down payment that you can afford, your income and your savings pattern.

So, depending upon your situation you have to take a decision.Smile Paying off debts is always a good idea so that it never becomes a burden. You can even check out the given page to know how much house you will be able to afford: http://www.mortgagefit.com/calculators/howmuch-afford.html

James
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Post Posted: Thu Feb 02, 2006 1:37 pm    Post subject:
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Hi Bill,

Don't panic. The intention of this community is not to frighten you but we try here to sort our problems by mutual discussion and thus help to take an appropriate decision. Smile

Paying off debts in time is always good and you should give maximum priority to it. Rest of the conditions will automatically favor you after that.

God bless you.

For MortgageFit,
Samantha

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Post Posted: Thu Feb 02, 2006 5:47 pm    Post subject: Credit Scores
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Bill,

There are a few misconceptions here. On a conforming loan with scores over 620 and even under 620 a broker lender can you a conforming approval. DU (desktop underwriter) evaluates risk and while your overall credit score does come into play, you are more likely to get a higher rate because of debt ratio and or a lack of reserves combined with the ltv. That being said it certainly doesn't hurt to sit down with a lender/broker and review your options. The debt has to be a concern since the min. payment has increased so much with the changes in the banking laws the first of the year. So the real question you have to ask yourself is: Do I want to take on more debt i.e a mortgage when the credit card debt is so high. While paying off 90% would be great as long you ratio you may want to use some of that money in the form of a down payment....just my $.02

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FELECIA

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Post Posted: Fri May 16, 2008 12:28 am    Post subject: DEBT TO INCOME RATIO
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I OWE $15000 ON A HOME IN NORTH CAROLINA AND DO NOT WANT TO SELL THIS HOME [MORTGAGE $560 MONTH. I WOULD LIKE TO BUY A HOME IN ATLANTA, WHERE I NOW LIVE BUT I AM AFRAID MY DEBT TO INCOME RATIO WILL DISQUALIFY ME FROM PUCHASING A $240,000 HOME. I MAKE 5500 A MONTH, HAVE $30,000 IN STUDENT LOANS THAT I HAVE TO START REPAYING WHEN I FINISH SCHOOL. I HAVE NO OTHER DEBT. MY CREDIT SCORE IS $680. WILL I QUALIFY TO PURCHASE THIS HOME.
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Post Posted: Fri May 16, 2008 2:55 am    Post subject:
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Hi FELECIA,

Welcome to the forum.

Your credit score is good and you have sufficient income. So you may get the mortgage. Have you yet shopped for any lenders? If not then you should do it.

The rates are low now. So it is a good time if you have sufficient income every month. How long are you in your present job? Have you made any late payments in the last 12 months? If you have then it may effect and create problems to get approve for the mortgage.

Feel free to ask if you have any further questions.

Best of luck,
Larry
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Post Posted: Thu Aug 07, 2008 7:46 pm    Post subject:
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You say you have 5500 in monthly income but you haven't finished school yet? You might want to establish your income for a period of time before you go applying for that mortgage, stability of income and all that jazz.
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Post Posted: Sat Aug 09, 2008 3:36 pm    Post subject:
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Bill S I defintately agree that you should pay down that credit card debt first.

Felecia, a question, if you make $5500 a month do you really think you can afford a $240K home? Is 5500 gross or net? Me and my wife make about $75K/yr, have about 6K in credit card debt, and are looking to buy a home for about $70K just to play it safe. $240K just seems a bit excessive with the kind of money your making. Would you consider buying a less expensive home?

Good luck!

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MARCO11617

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Post Posted: Fri Sep 05, 2008 5:38 am    Post subject: FICO AND DOWN
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WE MAKE ABOUT 96K PER YEAR AND HAVE 35K FOR A DOWN. MY CREDIT IS POOR AT 620 TO 630ISH HER CREDIT IS FLAWLESS. WHAT CAN WE BE APPROVED FOR A MORTGAGE?
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Post Posted: Mon Sep 08, 2008 5:15 am    Post subject:
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Hi MARCO,

You have good income and the money you're putting down isn't less either. What's your credit? Is it 620 or 630? If your spouse's credit is good enough, I guess she could be there as the cosigner for the loan if at all you need to take the mortgage now. Because I feel you could try and repair your credit before going for the loan.

You can calculate how much you can borrow using the mortgage calculator at http://www.mortgagefit.com/calculators/howmuch-borrow.html .

Take Care

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