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Will I get a mortgage

28 yrs old Salary 40k a yr 550 a month side income.

Credit score 650-660 paid car and student loan on time both are done. Have a collection for a past medical bill. Score used to be about 715.

Steady work history. Been at same job since for 16 months. Prior job was 8 months was unemployed for 5 weeks in between.

looking to buy a home price will be between $117,000 - $140,000. No matter what price is I am going to put $35,000. I can go $4000 more for fees and closing.

Will my low Credit score prevent me from getting a mortgage? Zillow shows I will get one. I assume by me putting down 25-30% cash will help offset my low credit score.
  • October 30 2009 - Wesley Chapel
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Answers (6)

I think you will be OK.   You might want to consider a 15 year fixed conventional loan.  If you can afford that payment, you will find that you can obtain much better rate/lower costs on 15 vs 30 year at your FICO score and down payment amount.

  • October 30 2009
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You should be fine. You would help yourself if you had some credit though.
  • October 30 2009
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Profile picture for asiudasasaisud
Thanks for the info I was planning on getitng a 30yr paying around $200 extra per month towards principal.

I have a collection of $800 for a medical bill. I also have a $95 collection for BMG music service 6 years ago. I paid the $95 it does not shoe as paid on my credit report. I was told it will take 90 days to remove it has been about 60. When that comes off will my score go up. If I paid the $800 medical would my score jump allot?
  • October 30 2009
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Ironic as it sounds, if you pay off the medical, the collection agency will report it as paid............it will then remain on your credit for 7 years and lower your score somewhat.

I know how crazy this sounds, but its correct according to my credit agency where I run credit for clients.

Good Luck.
  • October 30 2009
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Ask the collection agency if the would agree to a deletion in exchange for payment in full.  If you can negotiate a deletion, that will have the best result for you.  Wayne is correct that showing paid can hurt, espeically if it is not reporting actively at this point.

When you apply, ask for quotes on 15 and 30, you might be pleasantly surprised at the difference you see for your current profile.
  • October 30 2009
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Hello Wesley,

Sounds like you're in pretty good shape. You may be able to get a conventional loan with that size of down payment.  However, the credit scores may be just a bit low so ask for an "Alt A" loan.

Your next choice would be FHA Home Loan.

The requirements for this type of a loan you seem to fit into.  However, I would only do this for a 3-5 years since you pay mortgage insurance in them not matter what the balance is.

Hope this helps!

Happy house hunting.

Jeff
  • October 30 2009
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