Zillow Advice: Home Buying - How can I get a mortgage with credit score just below 600? Have 20% down payment and plenty of incom

Nike thanks so much for your ...

Mon, 29 Jun 2009 04:53:00 GMT

Nike thanks so much for your help. I kind of wish I was moving to IL so you could help me.

Good for you, Sarah. Please ...

Sun, 28 Jun 2009 01:01:00 GMT

Good for you, Sarah. Please work closely with your chosen professional. Make sure to give as much information as you can, so they can advise as to your best way forward. Also, please make sure they have enough variety of Mortgage programs, and are well versed in the programs, to give educative and intelligent options regarding your situation. Even if you can't buy immediately, they will at least give you a concrete plan to follow.
As I said before, I would consider your application before I would consider a 700+ score client with no reserves or income. You are almost there, so don't give up now. The FHA loan suggestion is not based on your downpayment, but on the best rate program available for you if you have less than a 740 score. Even if you put the total funds available on a downpayment, there are "hits" to your rate when your score is below 740 and your rate will increase. Note that the FHA loan comes with mandatory Mortgage Insurance so let your professional show you actual figures based on different loan types, then choose the best one for you.
You seem to be very clear on what you are trying to achieve. If you pay $2400.00 a month in rent, and have paid on time, it seems like you can certainly afford a $190k property. Your debt ratio etc will have to be figured out by your Lender though.
Let your Lender be your guide, and be VERY VERY CAREFUL who you choose to work with.
Good luck to you. I hope it all works out well.

And I already know I said ...

Sun, 28 Jun 2009 00:58:00 GMT

And I already know I said advise instead of advice ... wish I could edit but life goes on.

Maybe you need to re-read ...

Sun, 28 Jun 2009 00:39:00 GMT

Maybe you need to re-read my answer Sarah, I was not rude at all, I advised that you fix your credit instead of trying to buy now. I gave you sound advise as a professional should do, but you seem hell bent on making a stupid financial decision. Sorry you don't like reality, but I don't dish BS. As for finding someone to help you ... you deserve everything you will get.

Here's what I told you, please point to the rude part in my advise to you.

"I'm sure you will get many responding shortly telling you how you can get one, but I'd urge you to work on your credit rating because any programs that are still in existence to accommodate this will be costly. Promises that you can always refinance to a better rate later, after you fix your credit, are load of hooey so don't fall for it. Fix the credit first and buy at a decent rate to start with. If you have plenty of income and have managed to save for 20% down, you seem to have the tools to fix your credit fairly quickly."

Next message to you was as below, again, I ask you to point to the rude comments towards you:

"Sarah, you should wait for your scores to go up so you don't end up being taken by people far too hungry to make buck off of you rather than help you. Don't buy into the self righteous BS that some throw out there and hope it sticks. People like Nike and his doppelganger are not at all interested in your well being. Working your score up a few notches will save you in the long run. If you have that much down, you should work your score to a place where a conventional loan works for you. What I was trying to explain to you and the shoe salesman was that an FHA loan is not in your best interest if you have that kind of down payment. Get your scores up!"

This Sarah, is called advise! Next time you ask for it ... please read it.

If you have 20 % to put down ...

Sun, 28 Jun 2009 00:39:00 GMT

If you have 20 % to put down in todays market you should have no trouble finding a seller who will owner finance.

Hi Pat,Ufortunately, ...

Sun, 28 Jun 2009 00:38:00 GMT

Hi Pat,

Ufortunately, I only originate loans in Illinois. However, my advice to you will be generic enough.
You should really first educate yourself as to the pros and cons of home ownership. For a First time homebuyer, I think you are doing the right thing by trying to find out as much as you can before you buy.
You should get a copy of your credit report (www.annualcreditreport.com), go over it and try to fix any problems you spot. Remember that too many inquiries, high credit card balances and too many open accounts can affect your credit scores too. Check that there are no unusual names, social security numbers or addresses showing up on your credit. This is becoming a guideline issue for many Lenders now, because of recent laws on credit. If you spot any problems, call email or write the bureaus and dispute them immediately. Keep checking with the credit bureaus until everything is cleared up (i.e don't take it for granted that they have fixed the problem the first time you dispute).
Secondly, please save up as much as you can. The FHA loan requires 3.5% downpayment and additional funds to close the loan. There are different Lender programs, but almost every one of them also wants to see that you have some "fall back funds" called reserves in your bank, after you close. Most companies look for a minimum of 3 times of your full monthly payment.
Of course, you need to have a job that pays enough income to qualify you for the loan. Your college diploma actually serves as credit towards the 2 year job history you need, so a copy of the diploma, your letter of employment and first paystub should be sufficient to meet that requirement. Also note that usually, you want to have no more than 43% (the Freddie Mac requirement) of your income going towards all the bills on your credit, plus your total mortgage payment - principal, interest, real estate taxes, home insurance, and condo association fees if you buy a condo.
When you get ready to apply for the loan, call at least 3 different Lenders and make sure they have the programs you are interested in. Don't be discouraged by any Lender who tries to put you down. Usually it is because they don't have the programs you want in their portfolio, or never took the time to educate themselves enough to be able to assist you with a variety of options. Keep calling until you find someone who is knowledgeable about the mortgage options, can intelligently explain them to you, and treats you with the courtesy you deserve. They will prequalify you for the best purchase price, loan amount, interest rate and downpayment available to you.
Then find a Realtor using the same guidelines I gave you in the paragraph above. They will help you pick out a property and write your contract.
Once your contract is approved, get a Real Estate attorney immediately. They should review your contract and protect your interests legally throughout the process. A lot of people make the error of thinking the Attorney only comes to the closing with you, but this is not the case. The sooner you retain the Attorney the better.
Then you simply provide whatever documents you are asked to, and you should be able to close on a property without too much stress.
Remember, educate yourself well, find professionals who will work hard for you and treat you with respect and go for it.
Good luck to you, both in college and in the homebuying process.
I will also post this in your question post on the other thread.
Sincerely,

Nike

No Greg, I was just curious ...

Sun, 28 Jun 2009 00:25:00 GMT

No Greg, I was just curious if I could get a loan or not. And you decided to be a rude a$$hole. I would hope that you do not treat your actual clients as horrible as you respond to my question. I am not mad about the truth that I can not get a loan. I just thought if someone would hear the whole situation rather than just look at my fico score to decide if I could get qualified. Thats all. I know my credit is not great, but I didn't realize that that was the only thing you jerks look at. It just doesn't make sense that someone who may have a higher score than me, but doesn't have a decent down payment or a decent income could get a mortgage and I can not. Anyways, PLEASE stop responding as I have already contacted someone who is willing to work with us.

Hey, Nike do you by any chance ...

Sat, 27 Jun 2009 21:55:00 GMT

Hey, Nike do you by any chance do loans in Missouri as I am moving there when I graduate.

Thanks

"THanks Nike and the few ...

Sat, 27 Jun 2009 21:24:00 GMT

"THanks Nike and the few others who actually gave me advice, which I was looking for."

Sarah,

That's your problem in a nutshell, you wanted to hear what you wanted to hear and not the truth. I gave you the truth and you don't want to accept the advice so don't ask next time. If you want to buy a house at inflated rates because you won't take the steps to properly prepare yourself, go right ahead, just don't expect any reputable lender to assist you. If you want an inflated FHA loan when you could get a conventional loan by taking corrective action on your credit, go right ahead. If you want to bury yourself in a house that you have no business buying right now, go right ahead. You have been turned down already and seem to want to get a different answer without changing the basics of why you got turned down.

Have a great day.

Aloha Sarah,I have been working ...

Sat, 27 Jun 2009 19:25:00 GMT

Aloha Sarah,
I have been working with a lot of people that are facing credit score challenges and creditors are not helping the situation with their actions. However, I work closely with financial planners and experts that help my clients raise their scores to fit their situation and get the best program for their money. That may be one place to start, a financial expert. It is normally free. Once you qualify for the best rate possible in a short amount of time, you can buy. In the mean time, you will be browsing for homes and researching the market. Just make sure to do everything the expert says because they will ensure you the top score. This is proven advice.