if you have baddies, what is the difference in 640, 660, 680 for morgage preapproval?

[HuntingMama]

I know that YMMV, but curious about what difference a fico score makes...  If we apply for preapproval for mortgage, (USDA only, we have no $ down) with some baddies showing up, how much difference does fico make for approval/denial of the loan?  

If you have 640 with old baddies, or a 660 with the same baddies, or a 680 with the same baddies, does it matter to the lender if your fico is better or not?  Or are the baddies sitting on the LO's desk like a 100 pound lead weight saying No, Heck No, or Absolutely NO WAY! 

I know that time heals all wounds, and I am currently working hard to clean up what I can...GW's and saving $ with hope for PFD's on the CO's.  (Got lots of good advice on this under the rebuilding thread)

Baddies are redeemed repo May'09, 3 unpaid CO's from '07 & '08, some lates from 3+ years ago.  All badies are from a 2 year period due to a job loss and medical issues.  Great credit before that, and it is slowly getting better now. 

I don't want to go in for preapproval at 640 with baddies, have the HP kick our fico's backward, and get denied.  How much more would it help to have 660 or 680?  Or doesn't it matter?  Of course, it is my plan to clean up at least some of the baddies so they won't be as much of an issue.

We can only pursue USDA, since we have no down$ and income/location qualifies for Guaranteed Loan.  Baddies/DH's FICO are holding us back from applying.  DH isn't up to 640 yet.  If we had to go FHA or Conventional, we wouldn't even consider a house because we have no down$.  A USDA loan would allow us to reduce our monthly rent $975 down to a total mortgage payment of $600-625 for the home price we want.  If we move into another rental, the going rate is $1,000 to $1,300 monthly. 

Here is where we currently are at with fico's:

Me = EQ scorewatch 649 today , TU myfico 649 from last week

DH = EQ scorewatch 625, TU myfico 604 from 11/17/2012

Best wishes,

HuntingMama

[webhopper]

There are huge differences between baddies that were caused by a job loss or medical issues and baddies that were caused by general neglect and irresponsibility. In my experience, if a lender sees a baddie that causes a concern, he will generally ask for letters to explain what happened. The score requirement is something that is established by the lender as a benchmarks so that loan approvals can be based on a concrete value rather than the subjective opinion of the loan officer. The differences in score requirements are due to there being different types of loans out there. Loans that are intended to help low income individuals or help develop rural areas or to help put first time homebuyers into a home are generally easier to get than a traditional conforming conventional mortgage. So depending on your criteria, you can qualify for USDA, Fha, Va, homepath, or various state sponsored programs.... or you can meet the more strict requirements of the conventional mortgage market.

[tooleman694]

The point of USDA and FHA loans, is to allow regular everyday people with regular everyday problems to buy a home.

If you have a 640 score, you probably got something bad on your report. But if it falls within the guidelines, you are in good shape.

I had to go FHA and I had defaulted on my student loans a couple years back and had a bunch of rolling lates on my auto loan last year. It was no probem.