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Home Loan Qualification - Bad Credit?

What are the odds of getting approved for a home loan (450k) if you have terrible credit (score 607)?

Public Comments

  1. Better idea: avoid credit altogether. Start your own business and increase your Income.
  2. You can qualify for a decent loan with a credit score of 600. There are 3 parts to the equation, Credit, collatoral, and capacity. Your credit is fine (so long as there are no bankruptcies, recent collections, or forclosures on your report), what I would be worried about is your capacity to repay. To get the best deal you need to go full documentation as far as proving your income. If you go with a stated income program, you will pay more in fees and rate. If you don't put any money down on this purchase (I'm assuming it's a purchase), expect to pay private mortgage insurace of $200/mo. Or, you can split the mortgage into 2, and it will have the same effect. Your principal and interest payment alone would be over $3000/month on a 30 year fixed at 7%. I seriously doubt you would qualify for 7% at 100% financing. I would expect your interest rate to be closer to 9% which would move you up to $3800/month. If you know you can afford this you should be good. The last part is of course collatoral. This can help determine your rate. The closer the size of the loan gets to the value of the home, the higher your rate will be. You should try to put 20% down on a home purchase. In your case this would be $90,000. Maybe a little unrealistic. Putting 30% down will always get you the best rate, however. Realistically with a credit score of 600, using 100% financing we would break your note up into 2 mortgages. The rate on the first one would be at best 9.95. Maybe 8.95. Lets keep it at 9.95 though for the example. The second mortgage would havea rate of 14%. No question that that's exactly what it would be. Your payment on the first would be $3100/month, and $1100/month on the second. Your total payment would be $4,200/month without taxes and insurance. The blended rate (the rate calculated between the 2 mortgages based on 80% of the 1st, and 20% ofthe second rate) would be about 10%. If you were to just have 1 mortgage, your rate would be at best; 11% - a payment of $4,285/month. These are of course using 30 year fixed programs as the subject note. Payments would be different if you used an adjustable rate mortgage for the first 2 years in order to improve your credit and get a better fixed rate deal afterwards. Of course, if you don't clean up your credit, your f'd. You could also get into an interest-only loan where you just pay the interest. That would lower your payments by nearly a fourth, but you will have to pay amortized payments in 2 years(principal as welll as interest). If you can't afford it now, you can't afford it when it amortizes. Too many young couples lose homes by not thinking things through in the long term.
  3. Dave ...where are you finding 100 puchase money, stated income,607 mid, assuming self employed since I KNOW there is no one left doing wage earners? Asking seriously, not trying to be difficult.
  4. You can not go stated income to 100%...so disregard the thought. if anyone tells you to go stated income to qualify for a loan whereas you are a typical wage earner, run, and contact the FBI. Stated income loans for borrowers that do / did not qualify is continual perpetuation of the problem that is forcing our market into it's rapid decline. There are programs for fist time home-buyers that will allow for great rates, fixed rates and easy qualifiers. In fact you may, based on a note rate of 6.375 with low MI have a payment of 2793.10 @ 100%. This does not include insurance or taxes. the downside to these offerings is that they do not allow for loans above conforming loan limits of 417k. If you have money down...you can still purchase at 450k, provided your loan does not exceed 417K. Also...PMI is now tax deductible if first time home buyer. Look for a broker adept at 1st time home-buyer programs, and not a typical 1 dimensional sub-prime rate sheet reader
  5. Wow-what a long answer; I don't see anything in the question about stated income. If your income can support the house payments, your chances of getting the loan are very good.
  6. Above 600 - although not great - you are likely to get a loan, the interest rate may be slightly higher though Visit http://www.cheap-credit-cards.org for more information
  7. I can help with this loan. Contact me whenever possible. 513-860-2940 ext 10 msmith@premierloangroup.com Martin Smith
  8. Bad credit is one of the worst problems to have... however there exists a solution. I will hereby talk from my personal experience. I did debt consolidation a couple of years ago, however If I had to do it again I would pay to some minor details, if someone wants to get out of debt today it is pretty easy with a debt consolidation plan, however it may get a bit tricky at times, I suggest you get as much information as possible online on this first, a good place to start in my humble opinion is astraight to the point ebook with question and answer I found : http://umgarticles.atspace.com/debt-consolidation.htm if it helps kindly remember me in your voting!.. cheers!
  9. almost no chances ! But you can improve your credit ! There you go : Also take a look there, it may help you : http://index-go.com/improve-credit-score-get-out-of-debts-fast.asp Good luck !
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