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My credit score is a 623 and my co-borrower has good credit history and the income necessary for me

My credit score is a 623 and my co-borrower has good credit history and the income necessary for me to get approved for a FHA loan. However, my co-borrower co-signed on a FHA loan where the borrower has late mortgage payments. Could I still get approved for a FHA loan? Is there a way to use my co-borrower's home as collateral?
  • September 13 2012 - US
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Answers (3)

Profile picture for Ofe Polack
The best and easiest way for you to find out what to do is to contact at least two mortgage brokers, they will pull your credit scores and discuss your individual situation.  Maybe you need to improve your credit or maybe you may need another co-borrower, but the lenders will be able to tell you. 
  • September 13 2012
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Profile picture for Grant Gerhart
They are currently late on their other home? Or they have been late in the past? For FHA you have to be current on your house payments for 12 months. No lates at all. I have banks that will give FHA loans to people with credit scores as low as 500, out here in CA. Keep in mind you're going to pay for it though...
  • September 13 2012
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Profile picture for James Bocek
Hi there,  Unfortunately, most (if not all) lenders now require a minimum 640 FICO score for an FHA loan (used to be 620).    That said, you're close eenough that a rapid rescore could boost your credit to the needed 640+ within just a few days.   Feel free to call me if you'd like more info...   Re your co-borrower question:   That depends (how far in the past are the missed payments and how late were they??)  Also, you cant use another home as collateral but you can, if qualified, borrow against the other home (via HELOC for example) and then use the money borrowed as part of your down payment for the new home.  Hope this helps...  Feel free to call me if you have any questions.
  • September 13 2012
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