Can my brother get a Mortgage loan for $140,000 with a fico of 535

[Anonymous]

My brother has a fico score of 535 and his wife has a score of 579, they found a house in Los Angeles for $140,000 and they are first time buyers. Is it possible for them to get a loan? and if so how much would they need to put down. They make about $110,000 a year.

Message Edited by ksanderl on 04-21-2009 10:16 AM

[brownee]

Most lenders now require at least a 620 mid score to get a loan. I've heard there are those who go below that (like 580), but if you do find one, they're usually charging a very high interest rate.

[Anonymous]

Why are their scores so low?

If they have high credit card utilization, paying that down would help a lot quickly. If they have charge offs and collection accounts, they can try PFDs. How recent are the bads?

Looks like his wife has a shorter ways to go. What is her income? Maybe they can focus on improving her score and she could qualify by herself sooner?

[nathan]

Probably not. Tell your brother and his wife to fix their credit and get their middle fico scores to atleast 620. Mortgages with 500 scores are now history unless your compensating factors are enormous. Va and fha loans do not a require a particular score per se, but lenders have discretions to determine acceptable scores.