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rickfeelyga · Joined: 14 Jan 2007 Posts: 4 2.77 Dollars($)

My fico score is 583 and I want to buy a house really badly. I have about $4,500 saved for a downpayment/closing costs. I am looking for a $90,000 loan. Everything is paid on my credit file and I always make payments on time. The low score is from my college years when I just didn't pay on my credit cards. Since then, I have paid everything off. I have a steady job that pays about $45,000\year and I only owe $2,000 on a car loan with no other debt. What are my chances of qualifying for a loan? My wife doesn't want to wait any longer to buy a house so the pressure is on:) We pay $800/month in rent right now, so I think we can afford it no problem. Thanks!!

wablola · Posted: Sun Jan 14, 2007 2:06 pm Post subject:

You can qualify for a loan, however with a FICO of 583, your rate will be high.

rickfeelyga · Joined: 14 Jan 2007 Posts: 4 2.77 Dollars($)

we did indeed qualify for a loan with ditech earlier, it seems pretty ridiculous though here are the terms: 3 years fixed at 11.35apr then it converts to an arm. for an $85,000 loan, we would need $8,200 down on top of about 3,000 in projected closing costs. This seems a little outrageous to say the least.....should I expect quotes to be this ridiculous or should I expect something better than this? We just applied for a FHA loan too, it seems like we would qualify for this, but would the rates be this high as well? One more question....Are there programs that we sould use as first time homowners even with this credit? I beleive that there is something with th e FHA, but am not sure if our credit would keep us from using it.
Thanks so much for all of the feedback!!

adonis · Posted: Sun Jan 14, 2007 9:42 pm Post subject:

But Wabloba, FICO score isn't a major factor for FHA loan, isn't it?

sara · Posted: Sun Jan 14, 2007 9:51 pm Post subject: RE: Fha loan credit score

Yes Adonis, FICO score isn't the primary factor for FHA loans. In fact, these do not apply to FHA insured loans.

Rick, your down payment seems high enough when you are paying $3000 as closing costs. I think you can expect better offers than this one you qualified for at Ditech. I hope you haven't moved forward with it. If not, then there's nothing to worry.

Your credit score isn't fair enough for a conventional mortgage but you may still qualify for loans at higher rates of interest. Lenders offering FHA insured loans consider your overall credit history, your rental and mortgage payment history for a year and any new credit or inquiries made during that period of time. The lenders will also take into account whether you have paid judgments against you.

The lender will review your debt-to-income ratio to find out if you are financially strong enough to pay off the loan. Moreover, they will consider foreclosures and are quite flexible with loss mitigation facilities, if you have applied for any.

Thanks,

Sara

Guest

yeah Rick, there is a first time home buyer program offered by the Fannie Mae. It's the Community Home Buyer's Program offerd to those having low/moderate income and not having a fair credit score. You need not have a credit history also.

wablola · Posted: Mon Jan 15, 2007 12:37 pm Post subject:

Hello Adonis,

I was replying to his first post which did not specify anything about a FHA loan. Yes, an FHA loan would be great. However, if rickfeelyga just hangs in there a bit longer to improve his FICO, he may be able to get a better rate and also more options for home loans.

rickfeelyga, you should be patient and not be pressured into purchasing a home. Purchasing a home is a huge commitment. Talk to your wife about your finances and create a plan before actually shopping for a home or home loan.

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Can I qualify with this score?