what can I expect?

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My husband and I would like to purchase a home. We have credit scores of 615 and 580. We make decent income and as of late, all accounts have been paid on time. The home we want to purchase will cost $124,000. Is it likely that we can get financed in todays market?

jerry · Posted: Mon Nov 17, 2008 3:20 am Post subject:

Hi jenj!

FHA offers loans to people with 580 credit score. And as you have mentioned that you have paid the bills on time and that your income is good, I think you will get a loan. You can speak some of the FHA approved lenders and then take the decision.

Thanks,

Jerry

gmakerley · Posted: Mon Nov 17, 2008 9:39 am Post subject:

i wouldn't go so far as to say that you're a shoe-in for financing, but with scores as you noted, the likelihood of your obtaining financing is pretty good. what you'll need to do is to have a ready explanation for whatever it was that created the low scores. if you had hardships that prevented you from paying all bills on time in the past, you may be required to document such a situation.

what you've got in your favor is that your bill-paying habits have recently been good. with fha loans, the scores will generally work. but, of course, your income, your assets, and your overall debts will have a great deal to do with being approved or declined.

elnoralittle · Posted: Mon Nov 17, 2008 10:17 am Post subject:

contact your lender to get prequalified before looking at homes.

The lowest score for fha is 580. However that doesn't garantee you will be approved. There are compensating factors to every loan.
On FHA, you will need 3% down, if purchasing before January. This money has to be your own, or a gift from a relative.
Also, the payments need to make sense. Most of the time FHA doesn't like you to use more than 32% of your income on housing expenses. There is always exceptions to the rule, and if automated underwriting approves you, chances are you will be fine.

Good luck!

shayneroy · Joined: 12 Nov 2007 Posts: 51 21.08 Dollars($)

Hi Jenj,

With the information that you gave us, I would say - It doesn't seem very difficult for you to obtain finance for the home you are looking to buy. In this market where FHA is for the aid of people with low to mediocre credit profile, 580 is certainly doable. However, once your credit profile and income is reviewed by the loan officer, you would get to hear much concrete answers. But, for now - You certainly are a strong contender to qualify for an FHA loan. I can say that because I being a "Full Eagle" approved FHA Lender, do this every day and a 580 score profile is some thing that we have also closed. The minimum credit score that most of the FHA lenders look for is 540.

Go ahead, speak to an FHA approved lender, your likelihood of getting an FHA loan is very high

Good Luck!

Posted: Wed Nov 19, 2008 1:20 pm Post subject:

FHA just put out new guidelines. 580 is the lowest you can go.

shayneroy · Joined: 12 Nov 2007 Posts: 51 21.08 Dollars($)

Wow, that's an update for me, thanks so much for the info, I would have to quickly check with my underwriting department. Once again, your info was much appreciated. Did they just eliminate below 580 to 540 manual underwriting?

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