Chances of FHA loan.

[Anonymous]

We filled for Cap 7 in 2010.  We did not reaffirm the home but did a pay and stay for a while but ended up letting it go.  We have had 7 years of not great credit because of the bankruptcy and late payments.  I have gotten all of the accounts current and I am working on getting the one credit card we have paid off. 

Is it possible to get an FHA loan with a low credit score of 580 if you have the 3.5% to put down?  I will be looking to try for a mortgage around Dec of this year but because of the past bad credit I am worried that it may not happen so I would like to see if it is even possible before I get my hopes up.  I will continue working on our credit either way but wondering if it is doable at 580 with money down.  Thanks!

[Anonymous]

I know that 580 is the LOWEST score that will go.  However with a 580, you have to have more than 3.5% from what I was told.

[Sbrooks1]

There is a lot more to consider beside the scores. DTI is a major factor and also time since you were late, even 30 days. fha will require at least 12 months since a late and maybe more if it's a mortgage late and Kate's after BR are a serious issue. Go read the FHA guidelines they are pretty easy to understand and clarified so much for me. Keep reading the forums and post in the rebuild section , those folks helped me tremendously

[Anonymous]

Thank you for the reply!  I looked up the guidlines and it said 580 plus 3.5%, under 580 10%.  Who should I call to clarify what the amount down would be?  Thank you

[Anonymous]

All of our accounts will be on time for 12 or more months at the time of application.  I am going to try GW letters to see if Capital One will take a few off but I know this is hard to do. 

I will have to look at the DTI to see what is factored in and make sure that I get it down as far as possible.  Can my husband apply for FHA himself?  I have student loan debt and he is the high income not me.  Thank you!

[StartingOver10]

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@Anonymous wrote:

All of our accounts will be on time for 12 or more months at the time of application.  I am going to try GW letters to see if Capital One will take a few off but I know this is hard to do. 

I will have to look at the DTI to see what is factored in and make sure that I get it down as far as possible.  Can my husband apply for FHA himself?  I have student loan debt and he is the high income not me.  Thank you!

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Your husband can apply by himself; however, if you live in a community property state, your debt will be taken into account as well as his debt if you get a government-insured loan (FHA, VA, USDA).  If he gets a conventional loan, then your student loans will not be counted - but the allowed ratios are lower for conventional loans.

[ShanetheMortgageMan]

500-579 scores require 10% down.  580+ scores allow 3.5% down.

When did your home finally get foreclosed on?  That is the date FHA goes by, and would require 3 years from then (unless the foreclosure was due to an extenuating circumstance, then just 1 year is needed).

[Anonymous]

Thank you for the replies.  Online it says that Michigan is an “equitable distribution” state.  What does that mean?  Our banruptcy was 2010, we let the house go back in 2012.  The house was included in the backruptcy and we decided to pay and stay until it became too much to afford because of medical issues. 

[StartingOver10]

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@Anonymous wrote:

Thank you for the replies.  Online it says that Michigan is an “equitable distribution” state.  What does that mean?  Our banruptcy was 2010, we let the house go back in 2012.  The house was included in the backruptcy and we decided to pay and stay until it became too much to afford because of medical issues. 

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Equitable distribution is not the same as a community property state. Michigan is not a community property state. There are only 9 community property states:

Louisiana, Arizona, California, Texas, Washington, Idaho, Nevada, New Mexico, and Wisconsin

[Anonymous]

So that means we are ok to just have his score and income used on a mortgage?