Posted on: 08th Nov, 2007 06:19 am
When a person has less than perfect credit, where is the best place to apply for a mortgage.
Hello Glwerner,
What is your credit score?
There are many lenders who are willing to work with people having poor credit. You may get high interest rates offered to you because of your credit. Shop around for a while to get reasonable rates.
You can try the FHA mortgage. There are FHA insured lenders who provide loan to people with credit score as low as 550.
What is your credit score?
There are many lenders who are willing to work with people having poor credit. You may get high interest rates offered to you because of your credit. Shop around for a while to get reasonable rates.
You can try the FHA mortgage. There are FHA insured lenders who provide loan to people with credit score as low as 550.
the first best thing to do is to contact a lender who can review your credit with you, work with you as you clean up whatever may be hindering you, and direct you into the right product.
yes, fha is a viable alternative for many whose credit backgrounds are shaky, but there are many factors to take into account in qualifying. other types of loans exist that you may qualify for as well, but the first step is to truly determine precisely where you stand as far as your credit is concerned.
edited - if someone wants additional help or has other questions they can post more to the forum. I notice a lot of posts that say "this is complicated and there are a lot of factors contact me" It will help and benefit all the visitors to these forums if you post these factors and make the process transparent without disclosing personal information.
yes, fha is a viable alternative for many whose credit backgrounds are shaky, but there are many factors to take into account in qualifying. other types of loans exist that you may qualify for as well, but the first step is to truly determine precisely where you stand as far as your credit is concerned.
edited - if someone wants additional help or has other questions they can post more to the forum. I notice a lot of posts that say "this is complicated and there are a lot of factors contact me" It will help and benefit all the visitors to these forums if you post these factors and make the process transparent without disclosing personal information.
FHA is a good option to start and is not credit score based (there is no minimum score)... they do care about credit however.
I can also say that when a company says that bad credit is ok ... is probably just trying to farm your information and sell it to other mortgage companies as a lead. You can get a loan with bad credit but it is not ok and it is not easy.
Please try and explain your situation in a little more detail and we may be able to point you in the right direction.
I can also say that when a company says that bad credit is ok ... is probably just trying to farm your information and sell it to other mortgage companies as a lead. You can get a loan with bad credit but it is not ok and it is not easy.
Please try and explain your situation in a little more detail and we may be able to point you in the right direction.
Eric,
"FHA is a good option to start and is not credit score based (there is no minimum score)... they do care about credit however"
You mean the credit score doesn't matter but the credit payment record matters. But the credit score is based on the credit payment record. Can you pls explain this
Also, isn't there a minimum score, however low it may be, that the fha looks forward to. I mean ok if you have bad credit you can even then qualify but isn't there a score below which you won't.
"FHA is a good option to start and is not credit score based (there is no minimum score)... they do care about credit however"
You mean the credit score doesn't matter but the credit payment record matters. But the credit score is based on the credit payment record. Can you pls explain this
Also, isn't there a minimum score, however low it may be, that the fha looks forward to. I mean ok if you have bad credit you can even then qualify but isn't there a score below which you won't.
""FHA is a good option to start and is not credit score based (there is no minimum score)... they do care about credit however""
You mean the credit score doesn't matter but the credit payment record matters. But the credit score is based on the credit payment record. Can you pls explain this
Also, isn't there a minimum score, however low it may be, that the fha looks forward to. I mean ok if you have bad credit you can even then qualify but isn't there a score below which you won't.
Excellent question and whas the hardest thing for me to wrap my head around at first. The thing to understand and this goes for all mortgages is to stop thinking of the score first. The credit score is only 1 factor in the mortgage process.
FHA cares about on time payments in the last 12 months. Typically, as long as you don't have judgements or tax liens and collections are paid, you can qualify for FHA as long as you have paid everything on time for 12 months.
If you started the 12 months with a 400 credit score. You probably won't have much over 500 by the time the 12 months is up. According to your report you have been paying on time and your score is on its way up. Still got a long way to go though. You are the perfect borrower for FHA. Now if you wanted to get a conforming loan you would have to wait until your score caught up to your history and this could take years.
Other examples would be someone who makes enough money but has maxed out credit cards. They can afford the payments and pay on time. They can afford the new mortgage but because of the credit lines being maxed out they have a 560 credit score. They wouldn't qualify for a conforming or subprime loan... but FHA would love them.
There is no guideline as far as how low a score can be... but common sense and the thousands of credit reports that I have seen.... if you have below a 500 score you are probably not going to have the credit profile to qualify. That is why I say it is credit report driven... and I state the problem with companies who say "All credit accepted"... you have to pay your bills on time to get a mortgage, it is that simple.
You mean the credit score doesn't matter but the credit payment record matters. But the credit score is based on the credit payment record. Can you pls explain this
Also, isn't there a minimum score, however low it may be, that the fha looks forward to. I mean ok if you have bad credit you can even then qualify but isn't there a score below which you won't.
Excellent question and whas the hardest thing for me to wrap my head around at first. The thing to understand and this goes for all mortgages is to stop thinking of the score first. The credit score is only 1 factor in the mortgage process.
FHA cares about on time payments in the last 12 months. Typically, as long as you don't have judgements or tax liens and collections are paid, you can qualify for FHA as long as you have paid everything on time for 12 months.
If you started the 12 months with a 400 credit score. You probably won't have much over 500 by the time the 12 months is up. According to your report you have been paying on time and your score is on its way up. Still got a long way to go though. You are the perfect borrower for FHA. Now if you wanted to get a conforming loan you would have to wait until your score caught up to your history and this could take years.
Other examples would be someone who makes enough money but has maxed out credit cards. They can afford the payments and pay on time. They can afford the new mortgage but because of the credit lines being maxed out they have a 560 credit score. They wouldn't qualify for a conforming or subprime loan... but FHA would love them.
There is no guideline as far as how low a score can be... but common sense and the thousands of credit reports that I have seen.... if you have below a 500 score you are probably not going to have the credit profile to qualify. That is why I say it is credit report driven... and I state the problem with companies who say "All credit accepted"... you have to pay your bills on time to get a mortgage, it is that simple.
To add to what eric said: FHA are common sence loans where most conforming loans are set standard loans. This means that with FHA if something is missing but overall file is strong you still get the program and on conforming if you dont fit into their set of qualification you need to look for a different loan.
What is the first thing to do about it?
lyn, i don't think you received the direction you wanted.
if you're seeking a mortgage for the first time, one of the best ways to locate a good lender is to ask the advice of friends - trusted friends. make sure that your trusted friends are knowledgeable, though.
you can certainly seek assistance from any of the lenders on this forum, by simply requesting a mortgage quote (you can click on "mortgage quote" on the top of the page here).
frankly, your being on this forum and asking questions is also a good start - you'll obtain much valuable information from the people who post here.
if you're seeking a mortgage for the first time, one of the best ways to locate a good lender is to ask the advice of friends - trusted friends. make sure that your trusted friends are knowledgeable, though.
you can certainly seek assistance from any of the lenders on this forum, by simply requesting a mortgage quote (you can click on "mortgage quote" on the top of the page here).
frankly, your being on this forum and asking questions is also a good start - you'll obtain much valuable information from the people who post here.
like to purchase home for $210,000. At the end of the month should not have any debts. Will keep one credit card account open. Credit score is 596. Will I have a good chance of getting FHA.
a good chance, alma? no.
a chance at all? it appears so, based on posts i have read on here that claim you can obtain an fha loan despite a score below 620. you'll need to shop around quite a bit for a lender who will bite, but you also have the option to click on the "mortgage quote" button at the top of our page that will allow one of the lenders here to get back to you with more information.
a chance at all? it appears so, based on posts i have read on here that claim you can obtain an fha loan despite a score below 620. you'll need to shop around quite a bit for a lender who will bite, but you also have the option to click on the "mortgage quote" button at the top of our page that will allow one of the lenders here to get back to you with more information.
Mortgages are already expensive and applying for a mortgage loan with bad credit can even be more expensive. Yes, there are lenders which cater to people with bad credit; however, you might find yourself in a really difficult situation when you finally find one. Why? Because on top of your bad credit, you will be charged higher interest rates which could cause you to be in more debt, decreasing your already bad credit even further. Mortgage loans with bad credit are totally possible, but you might want to improve on your credit score first to make sure that you can afford the rates. Learn more about the effects of bad credit on loans on http://www.badcredithistories.com/effects-of-bad-credit-on-loan/.