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We are looking for a home loan in Florida. We have a fairly large down payment, but our credit is n

Most of my bad credit is a result of an accident I was in, but some of it is old.  We have the ability to make payments, and need to find something soon.

Thank You
  • August 26 2013 - US
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Answers (5)

Some lenders offer USDA/VA/FHA down to 580 FICO. But scores under 600 usually require manual underwriting and FHA requires manual underwritten loans to be subject to max Debt-to-Income ratio limitations. I agree with what has been said here. Some collections have stopped reporting and when you pay them off, it creates an updated payment history from last reported date to current and could affect your score. You LO should read the DU and tell you if any debt is required to be paid off before you go and pay it yourself. And it is always a better experience if your score was at least 620. But programs are in place for scores down to 580.
  • September 14 2013
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Don't despair! I have been very lucky over the years and have helped countless individuals and families get into a home whom have experienced credit issue not unlike yours. Think of it this way. The Underwriters are looking for cause and effect. We know what caused the credit issues, but how will it effect the borrower in the future.

Some creditors are very aggressive and will pursue taking you to court and even go as far and attempt to garnish wages. The UW doesn't want a bunch of unresolved issues festering on your report that could cause issues now or down the road. I recently helped a man whose credit score were in the low 500s and we were able to bring them to the  620 plus therefore making his path to homeownership an easier one. It just took some guidance.

Please find yourself an experienced Loan Officer who can help put you on the right path. But I caution you, make sure before you take their advise, get a couple of other opinions as I hear horror stories every week about some yahoo LO tell a borrower to payoff a collection only to see their scores drop. There is a right way and a wrong way. Hopefully you find yourself in the hands of a capable LO.

Best of Luck!
  • August 26 2013
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Profile picture for wetdawgs
A very very rare lender may go as low as 580 mid FICO score for the lowest party for an FHA loan.   You will be more likely to be successful if you have FICO scores > 640
  • August 26 2013
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yes both are below 600
  • August 26 2013
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Do  you know your FICO credit scores?  
  • August 26 2013
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