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So I have been checking some old threads that menion 620 mid score lenders ( or less) But I personally called several and I was told 640 minimum for FHA.
How ever I did get one clear cut yes at 620 with additional "hoops" from Ruoff Mortgage, heres the email I received;
For application, you would need:
· Paystubs covering 30 days (if paid weekly – 4 paysubs, if twice per month or every two weeks – two paystubs);
· Two most recent bank statements;
· For this time of year, 2010, 2011, and 2012 W2’s;
· 2010, 2011 tax returns.
I can run your application and credit report if that is what you would like to go with. For FHA, at a 620 FICO score, the below are items we would need to have. The “hoops” I was mentioning before over and above what is already required by FHA.
· Gift funds are not allowed, so 3.5% would have to be put down and you would not be able to use the Indiana Housing program – which allows you to get 4% in down-payment assistance;
· 3 months reserves of PITI (this means after you put up your costs to close; downpayment, prepaids, and closing costs, you would still have to have 3 months worth of your principal, interest, taxes, and insurance available in your bank account;
· Verification of Rent is required with no late payments in the past 24 months;
· Homebuyer education is required for 1st time homebuyers;
· Payment shock (or difference from rent to new payment) cannot be greater than 20% and Debt to Income cannot exceed 43%
Those are their overlay requirements.
More and more Lenders are requiring a 640 minimum score.
Yes there are still a few doing 620 scores and a very super limited number doing 580 scores.
You would have to keep shopping Lenders in your area, reason being while I may have a Lender qualifying a 620 score, there is always a possibilty they do not do business in your area.
Best thing in my opinion to do is contact Brokers. Ask them if they have Lenders qualifying 620 score. If they do then you can ask more questions, and or go sit and talk to them.
I know many still shop for those Lenders qualifying at a 620 score and lower, but as pointed out in your post it isnt as easy. If you shop enough, you may just find the right Lender who will not require all the extra overlay requirements.
A few questions...what are your current scores and history...if its something like high utilization you could try to pay down your debts and see a score increase...lates or derogs could use a simple GW letter to remedy.....I think my lender said 620 was ok...I used 5/3
I also had a hard time when I was stuck at 620 - but I did get approved through First Guaranty Mortgage, though the rate was not as competitive. Once I got to 640, I was able to shop around & got a better rate from FGMC as I had them competing with another lender.
Sounds like credit score qualifications are on the rise again.