Profile picture for rachish

My credit score is 675. Is it possible to qualified for loan? If so, what type of rate ?

  • September 25 2011 - Baltimore
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Answers (7)

Profile picture for sunnyview
Owner financing for someone with a credit score of 675 is not the best, cheapest or safest option. I would avoid it.

Zillow mortgage marketplace is a good place to rate shop. You can input your basic information and then get a range of offers anonymously. There are good lenders there, but I would read the reviews in their Zillow profile before deciding who to call.

You can also shop rates in your local area by calling a community bank or credit union to see what they have to offer.
  • October 20 2011
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Profile picture for mr.longbeach
Look for owners financing in your city
  • October 20 2011
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Hi Rachish, Please, please, please speak with a loan officer who understands credit scores.  Lower scores can mean higher fees and higher rates, not only on your mortgage, but on all credit. It can cost you a job and even higher health insurance rates.  Credit matters!

You can qualify for loans at 675, but often if you spend a little time working on your credit to improve it you will get a better loan, better rates, and better fees. 

Two books I like to recommend are "The Big Score" by Linda Ferrari and Dave Ramsey's Money Makeover.

Also, if someone tells you that you need to pay off old collections, beware!  The likelihood that this will actually hurt your credit score and delay your home purchase for quite some time is high!

All the best in your search!
  • October 20 2011
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FHA Loan, Call a qualified lender or bank who does FHA. 
  • September 25 2011
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Hi rachish! Your credit score should qualify you for a few different loan types, but much of your qualification will be determined by how much debt you carry versus your income per month.  Your rate is going to depend on what TYPE of loan you get, how much of a downpayment you plan to do, how many years on your loan, the price of the house, and your debt-to-income ratio.
I have a few different loan officers who you could speak with -- there is no obligation to use them -- but you can find out how much of a home you could qualify for, and what your best options may be.
Please let me know if you would like more information.
Thank you!
Sincerely,
Marney Kirk
Keller Williams Excellence Realty
  • September 25 2011
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One other thing I wnated to pass along to you, I see your in Baltimore. I'm in Crofton so know a fair amount about whats available in Maryland. If your a first time homebuyer there are great programs available to you. get in touch if you like to know more.
  • September 25 2011
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your credit score of 675 is well within the range to qualify for any type of loan. The rate you will get depends on the date in which you "lock". and the type of loan you are getting. If it is a conventional loan the percentage of your downpayment also comes into play. The reason for this is there are risjk based pricing hits at various levels for credit score ranges and the cooresponding down payment percentage.
If you are doing a loan term 15 year or less then these hits are non existant.
Technicly the rates are the same for all but with the risk based pricing hits unless you want to pay points you may very well be better off paying less points and getting a higher interest rate to offset soem of the hits. Assuming you have the funds to pay any additional points. The best way to determine what is best is when shopping for your loan is to ask for a zero point rate, a one point rate, 2 point, 3 point rate. The do the calculations of how long it will take in monthly payment saving to recoup your investment or ROI.

One point = 1% of the loan amount, for instance on a $200,000 loan 1 percent is $2,000
If your monthly payment with no points is $800.00 and your lower monthly payment by paying a point is $750.00 then divide the $50 saving into the $2000 it cost you up front. In this scenario it would take 40 months to recoup your money. Now you could take this add calculate other variables such as how much interest you would earn in a Cd during that 40 month period but with CD's only paying 1 -1 1/2%  its not much as at so maybe the true cost is 42 or 43 months ROI. 
There is also the possibility of tax benefits with write-offs for points. Every persons financial situation is different and I'm not a CPA and not qualified to answer the tax question issue. Consult a qualified tax advisor.
  • September 25 2011
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