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Why can't we get even a pre approval for an FHA loan?

My fiance and I have been trying to get a pre approval for an FHA loan, but can't seem to find anyone interested in even giving us a chance.  My credit score is 650 and his is around 640.  He only has about a year of credit history but my credit history is good.  The worst thing I can think on my credit is i have 40k in student loans, which are still in deferment.  Together we make around 70k a year and we're only looking for house in the 40 - 60k range.  I'm really not understanding why everyone I contact seems completely uninterested or they tell us we need to work more on our credit....  Anyone have tips on maybe where I should be looking or even how to find someone who will give us a serious offer?
  • July 30 2012 - Monroe Township
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Answers (6)

I would be happy to look into this for you and will give you good feedback as to what the reasoning would be if we couldn't help you or what you can do to get approved it is something you can work at. Your scores are fine for an FHA loan.
  • July 31 2012
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Hi,

Do you know what your debt-to-income ratio is? Even though your student loans are in deferment, lenders will still assign a payment. This may be part of the problem. I also agree with the fact that depending on the loan amount, it could fall into what is referred to as a high cost loan. In other words, the closing costs as a % of the loan amount are to high.
  • July 30 2012
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I agree with Go Huskers. Your credit scores seem to be adequate.  Unless there are not enough credit lines on your credit you shouldn't have an issue. Talk to a national Bank they are able to do lower mortgage amounts which a mortgage broker can't do.

Good Luck!!
  • July 30 2012
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User,

Although Mr Goetz told you his true motivations, that's not true for all. The real issue most likely pertains to regulations that prohibit high cost loans. Because of the small loan amount, many would not be able to do it even if they wanted to. You should try your local bank or credit union.
  • July 30 2012
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See thats not something I've ever been told.  I appreciate your honesty and in response, what -would- be a price range that would be worth the work?
  • July 30 2012
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house 40-60k?   That may be why nobody wants your business.   Not enough commission in it to justify all the hard work that goes into FHA purchase loans.   just being honest...
  • July 30 2012
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