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Are there any lenders out there that can do a a conventional loan with 5% down with less than a 680

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February 14 2013 - Columbus
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Yes. Some lenders offer a 97% LTV mortgage which would require 3% down and a score of 640+
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July 07
Yes you are able to do 5% down on a conventional loan, and also there are options to have NO pmi at 5% down. Way better option that FHA, with a much lower payment and no Upfront PMI of 1.75% either. Monthly PMI goes up the lower your credit score is, but still should be less than FHA's. Their's is ridiculous at 1.3% per year.  

If you have 5% to put down, conventional is your best bet. If you would like to have some options worked up let me know. Thanks!

Kris
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November 06 2013
Okay, older post, but still applicable.  Yes, it is usually the mortgage insurance provider who has higher score requirements.  However, I am surprised that there is no mention of either lender paid or single premium mortgage insurance.  The best way around the limitations of mortgage insurance is to avoid it altogether.

All my best,

Deborah
NMLS #279125
WJ Bradley

"We Listen.  We Care.  We Deliver."
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October 15 2013
The minimum credit score rule is applied by the pmi companies, actually... and Fannie Mae's minimum conforming standards. The lower the credit score, the higher the risk of default, hence the need for a larger down payment. FHA has programs for buyers who put less than 20% down with credit scores as low as 640.

Tips to quickly raise your credit score:

1. pay down all credit cards and loans to below 50% of the original balance and keep them below 50% always.
2. Never miss a payment.
3. If you do not have 3 lines of credit reporting to the credit bureaus - open some but try not to have many more than 3. (credit cards, car payments, etc.)
4. do not co-sign for a loan for anyone - EVER.
5. payoff any collections or derogatory credit (past due medical bills, tax bills, anything that reports to the credit bureaus).

If you do this, within 12 months your credit should have increased considerably.

One last note - your total minimum monthly debt payments should not exceed 40% of your gross monthly income. 

Let me know if I can be of further assistance.
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October 15 2013
.[self promotion deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
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October 10 2013
Yes. I actually know Lenders that can do a Conventional loan with just 3% down and a 620 credit score. [Hyperlink removed by Zillow moderator due to violation of Good Neighbor Policy.]
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October 04 2013
Hi, I know it's been some time since your original post but the answer is YES!

According to the Homepath loan, you can purchase a FNMA owned home and you can put little down and the loan requires no mortgage insurance.

The lessor down payment requirements are for those that intend to occupy the properies. go to homepath.com and you can search properties that qualify for the loan program.

Otherwise the others are correct, with 680 score you'll find it difficult to get Private mortgage insurance. FHA, VA, USDA all allow in general for 5% or less. Conventional you have to have 720+ if you're not applying for the FNMA Homepath loan.

Just another side note... A lot of us have the Homepath loan. It's more difficult to find the loan that allows renovations. If you do find a home that rquires renovation the best bet is to utilize the FHA 203k full or streamline depending on what repairs might be needed.

If I could answer any other questions or be of further assistance let me know. I'd be happy to help!

Kim Lawson
Licensed Ohio Mortgage Loan Originator
My contact and licensing information is located in my profile.
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May 13 2013
Profile picture for vap0rtranz
Such a pleasure to read this thread.

I'm a consumer who bumped into this very scenario in Chicago and heard a LOT of similar B.S., but  brushed that all aside by thinking about it this way:

1) many lenders have low appetites for risk.  
2) you appear, as a consumer, to have a high appetite for risk

So some lenders will flat out say "NO" to some arbitrary score, say 680, because they correlate that number to all the foreclosures they've sustained.  Subprime and all their insurers.  Compound that with less of an investment on YOUR part, say %5 instead of 20, means you could more easily walk away from the mortgage (because its a fourth less money that you immediately would loose in foreclosing).

Other lenders have managed their finances better and are open to your scenario.  I found one broker who gave a flat NO and another who said, "yes; just give us more details about your finances".  So shop around.  I went shopping for financing BEFORE shopping for a home ... this industry should probably tell us consumers to talk to lenders and brokers first and save us any false hope :)
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February 27 2013
As a couple others said, it is the mortgage insurance companies that are not liking scores below 680.  If you are close have your lender run a "What if" simulator and see what you can do to boost it over quickly.
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February 15 2013
so very sad.  The agents come on and talk about how much their time is worth and how they are there to represent the buyer.

Gail is proof of the BS all that is, quick to push buyers into expensive options is more like it.

1. She is pandering incorrect information.
2. Quick to STEER people to FHA. 3.5% down? pleeease, the UFMIP adds another 1.75% to the costs making the argument to put down 5% and go conventional all the more stronger.
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February 15 2013
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Not only spam, but incorrect spam! 
Gail, please stop!
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February 14 2013
Conventioanl lender will not do less the 5% downpayment. You may want to consider FHA. [deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]

Gail Mercedes Cole
EXP Realty
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February 14 2013
Perhaps. Some MI companies may go to a 660 credit score although the MI is more expensive. Let me know if you have any other questions. Thanks!

Paul
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February 14 2013
Possibly. It's the Mortgage Insurance companies that are restrictive. I know of one MI company that it a bit more liberal than others if you have compensating factors such as low debt ratio, payment reserves, etc,..but without all the details it would be hard to say. Otherwise FHA will be your best bet.
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February 14 2013
 
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