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Would I qualify?

I am looking into buying my first home. Currently in the process of getting prequalified for a loan but things don't look good. The lender I have been talking to is not being helpful at this point so I don't know where I stand. He pulled my credit and its b/w 608-628. I have one bad thing on it from 2007 for an $800 cell phone bill-not making payments on this. I opened a secured credit card through my bank in February and have been paying it off every month. This did help my score. The lender said my credit was workable but needed to verify credit lines. I gave them 6 lines and I think they only verified 4 or 5. He said they did not help my score but didnt tell me why. They were my rent, power bill, gas bill, life insurance, garbage disposal, and car insurance. Now he is wanting me to try for a USDA loan when the gov't opens back up. I am trying to get a no down payment, no closing costs loan. He didnt tell what all loans he had looked into for me. Also, he didn't get any type of income information from me.

So, I am wondering if you can tell me from this information what happened and what you would recommend. The company he works for is an "affiliate of wells fargo home mortgage" so that may be the mortgage company he was going through.

Thanks!
  • October 16 2013 - Birmingham
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Answers (3)

it sounds like you might need to find a lender who will be willing to walk you through the process.  That is a very important step is to make sure you know what is going on with the process and why you are going with a specific loan. USDA loan will most likely not be the answer given your current scores but I think you do have other options with FHA or with some small adjustments to your credit to get into USDA financing.  VA is also an option if you are a veteran. 
  • October 17 2013
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The biggest problem is that your Loan Officer has not been clear and concise with you in explaining the details of what they are trying to accomplish. It's simple, for FHA most lenders can go down to 580 or so on manually underwritten files, so in your case you're mid scores probably around 615-620 mid score. Either way you should be a relatively straight forward FHA Buyer.

If you are wanting to avoid a down payment, then the USDA RDL is the loan of choice. But you'll need to get a credit waiver as the automated underwriting system will only approve loans at 640 plus. So the lender's underwriter has to approve your loan then send the file to the USDA for the credit waiver.

The ONLY way to proceed is to be on the same page with your Loan Officer and Lender. It is imperative that you are informed on all facets of the loan process. The fact that you are posting this question is evidence enough that you are not comfortable and the communication has been less than adequate.

Best advise to get the LO to explain the process so you can wrap your head around it or find a LO who can. Let us know if you need assistance.

Best of Luck!
  • October 16 2013
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It looks like that lender does not lend on credit scores below 640. We do however lend on lower credit score. From the score you listed b/w 608-628 works perfectly for my company. As long as you are purcvhasing a home that you can afford and your debt-to-income ratio is in line, we can get your loan approved.
  • October 16 2013
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