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Credit score is under 600 but we have 30% down payment

My credit score is upper 500 and my husband is a little under 620.
We have approximately $15,000 to put down on a home the is $45,000.
We are prepping to try to secure a conventional loan, but, I wonder how challenging this could be.  Please help.  Any advice would be helpful.
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July 30 2013 - Chicago
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Answers (13)

Profile picture for gator70
You can move this score 25-30 points higher in about 45 days. Read all you can at creditboards dot com or myfico dot com forums
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February 02
Carrington Mortgage Services can get you financed with a 580, if you shoot me an email, I can get you in contact with a loan officer.
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February 01
I was speaking with a lender recently and he mentioned that now you can get an FHA loan with a credit score as low as 580. You will have to pay PMI for (I believe) a minimum of 5 years, but I think this could be an option for you. Many lending rules just changed on January 10 of 2014, so I suggest checking with a lender if you haven't already purchased something since your post back in July.
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January 31
For any conventional loan that I am aware of, you will need a minimum score of 620
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December 23 2013
[spam deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
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December 22 2013
Profile picture for gator70
With 40% down payment you do have options from private money. Advertise a first deed of trust with a LTV of 60% on craigslist. You might see interest rates at 8%. 
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December 22 2013
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[Spam deleted by Zillow moderator. Please see our Good Neighbor Policy for information.]
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December 21 2013
Reach out to a lender they can walk you through your finances and let you know what your buying options are.
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August 02 2013
I believe you will have a considerable challenge on your hand.  The lower the dollar amount of the loan, often times, the more difficult it can actually be to attain.  I understand this flies in the face of common reason, but it has a lot to do with the fixed costs associated with underwriting a loan and the 'high-cost' regulations that have been imposed on lenders.  The 'high cost' regulations keep lenders from charging above a certain amount.  This is currently under a modification, but it is generally capped at a percentage of the loan amount.  So, if under the regulations the max amount of fees that can be charged to you is 5% of the loan amount and actually costs to write the loan are only $2,000 the lowest loan amount that could be written would be $40,000.  Keep in mind, this will then leave no room for profit on the loan, so it's a bad deal for the lender and won't be worth the paper it's written on. 
It is interesting to me as to how many of these regulations designed to 'protect' the consumer have actually hindered the low/moderate income borrower. 
If you have some liquidity (your $15K) and your credit is borderline I'd recommend you work with a mortgage originator who can advise you in areas of your credit you can clean up with some of your capital (the money).  Shortly thereafter you may see dramatic improvement in your credit.  At the same time establish a plan for housing that will work for you in both terms of cost and amenities.  You will most likely end up increasing your purchase price and it may take you a little longer, but you will be able to attain home ownership if you remain pragmatic in your approach. 
Good luck!
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July 30 2013
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We'll have $40% of the price of the home by tomorrow.
How does that matter?
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July 30 2013
I would speak to a lender. Only they are going to know if it can be done or not.
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July 30 2013
You could try FHA or Hard Money. You could also keep an eye out for Owner finance homes.
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July 30 2013
No conventional. Maybe FHA. Or 40% down.
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July 30 2013
 
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