Get an FHA Mortgage With A 580 Credit Score

As we turn to the New Year there are some laws and changes in the mortgage process that could hurt some people from getting mortgages and there is the expected interest rate climb with home prices slowly escalating upwards making the home buying pool for prospective home buyers a little smaller. I want to tackle this week some of the questions and concerns people have moving into 2014 looking to buy a house. With the start of the New Year it is a time a lot of potential home buyers begin the process of looking for a house and finding the right mortgage. A lot of it goes hand in hand since most Realtors have a few trusted lenders they use all the time to refer clients to… The biggest issue I see home buyers concern with is credit score. This is the driving factor on whether you can purchase a house with a mortgage or not. I have had past clients who made more than sufficient money to afford a home but could not qualify because there credit score was to low… So, what is an acceptable credit score to get a mortgage today? Most people tend to look at FHA for their mortgages because it offers the smallest required down payment that anyone can qualify for a mortgage with. A standard FHA loan requires 3.5% of the sale price as a down payment. But what are the credit score guidelines to get one of those mortgages? Everyone seems to think if bank A cannot approve me for an FHA loan because of my credit score then bank B will not be able to either. That is not true…. The federal government has a basis for which they will insure these types of loans. To qualify for the 3.5% down payment you must have a score greater than 580. If you have a score between 500 and 579 you can qualify for a 90% loan where you have to put at least 10% down. Now the question is find a lender that takes those scores…. Most lenders out there today require the credit scores to be anywhere from 620 to 640 minimum to qualify for an FHA loan. If you do not have that as a middle score between all of your credit bureaus they will generally decline you or offer some assistance to you in helping to get your credit score up….But there is a lender I use that will approve an FHA loan with a credit score as low as a 580. Yes, I said a 580. I know that most people will think there is a catch to this. There is not any. The qualifications are the same as a person who has a 620 or a 640 score. It is just that the mortgage lenders are answering to stockholders and shareholders and the risk is greater with a lower score and the paperwork is more scrutinized and they do not want to take on that risk level……. So, if you have a middle credit score of at least 580 ( by this I mean throw out the highest and the lowest and the other score) then call me because I have a lender that WILL approve you with that score as long as you meet the other FHA requirements. Dave diCecco Realtor/Broker Helen Adams Realty Cell: 704-519-7895 ddicecco@helenadamsrealty.com www.davedicecco.com