topic Re: Terrible fico score but a large down payment in IL? in Mortgage Loans

Terrible fico score but a large down payment in IL?

Relique — Thu, 03 Jan 2013 03:22:02 GMT

Hello,

Was wondering if a mortage is in an option for me in illinois? Here is some info:

-Last month's myfico.com shows 583.

-Last month's TU fico (from my CU) was 545

-Car repo and a ton of chargeoffs from 06-07 but nothing negative since.

-Have been approved for two secured cards this months but no other activities.

-Never had a mortage.

I decided not to dispute any information and just let negatives fall off in the next year to year and a half while gardening my three small revolving accounts.

Unfortunately I cannot show good income, but I am able to put a substantial down payment. I am looking at houses in the 120k-150k range and can put down a 75k downpayment. I have not talked to a professional yet just wanted to see if there is a chance at all before I waste time and money. If there is which lenders do you recommend I talk to?

Thanks alot guys.

Re: Terrible fico score but a large down payment in IL?

webhopper — Thu, 03 Jan 2013 03:29:57 GMT

@Relique wrote:
Hello,

Was wondering if a mortage is in an option for me in illinois? Here is some info:

-Last month's myfico.com shows 583.
-Last month's TU fico (from my CU) was 545
-Car repo and a ton of chargeoffs from 06-07 but nothing negative since.
-Have been approved for two secured cards this months but no other activities.
-Never had a mortage.

I decided not to dispute any information and just let negatives fall off in the next year to year and a half while gardening my three small revolving accounts.

Unfortunately I cannot show good income, but I am able to put a substantial down payment. I am looking at houses in the 120k-150k range and can put down a 75k downpayment. I have not talked to a professional yet just wanted to see if there is a chance at all before I waste time and money. If there is which lenders do you recommend I talk to?

Thanks alot guys.

Generally speaking you need to have a 580 to be considered for FHA... You may want to look at USDA and see if you stand a chance there?

I would think that you may try a site like Lending Tree and see if any offers pop up?

Re: Terrible fico score but a large down payment in IL?

Relique — Thu, 03 Jan 2013 03:43:25 GMT

Thanks i'll try that. Any other suggestions/comments are welcome.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Thu, 03 Jan 2013 03:54:09 GMT

I spoke with a lender who told me that I needed atleast 620 in order to be approved for an FHA loan. She sent me this link. I've been waiting to hit that 620 mark before I officially applied for a mortgage.

http://www.fha-home-loans.com/loan_qualifying_fha_loans.htm

Re: Terrible fico score but a large down payment in IL?

Anonymous — Thu, 03 Jan 2013 12:54:47 GMT

Some lenders require a 640 mid fico score for an FHA loan. Some properties may push you to go through their in house lender and there may be incentives to do so. You will have a lower interest rate if you can get your scores up. I would keep working to rebuild your credit as you don't want to be on the edge as they will pull your credit a second time to clear you closing and if it dips below the threshold, you would have to wait until it comes back up again. Buying is stressful enough without the worry of your credit score dipping below the threshold for qualifying. Be patient. Continue to garden for a little while longer. I encourage you to get score watch so you can keep an eye on your scores. You don't want the FAKO scores as they aren't accurate. For me, the TU fico score the lender pulled was identical to the one here on this site. I also have freecreditreport.com as well so I can pull all three reports every 3 mos at no additional cost. I ignore the scores on that site as they are way off from my true scores.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 01:25:53 GMT

@Relique wrote:
Thanks i'll try that. Any other suggestions/comments are welcome.

Your situation needs private investing. There are many private investing companies out there. Rates may or may not be a higher, but it is possible to find a private invester for your situation.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 01:38:20 GMT

That link that was postestop FHA guidelines states no more than (2) 30 day lates in 2 years?? I thought it was just no lates in 12 months??

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 01:44:47 GMT

@Anonymous wrote:
That link that was postestop FHA guidelines states no more than (2) 30 day lates in 2 years?? I thought it was just no lates in 12 months??

FHA requirements, USDA requirements, VA requirements, etc etc are a base of minimum qualifications to be approved for their programs. Each creditor lender has their own requirements which are usually a little harder for qualification.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 04:02:23 GMT

+1 I had to switch lenders to go through the builder's lender. And the first lender required a 640 for a FHA but this new lender requires a 660. My mid fico is 703 so no problems there. They had another program that eliminated the mortgage insurance out of the loan. That program is also an FHA loan but requires a 700 score. I didn't know there were programs out there that are so steep in credit requirements.

Re: Terrible fico score but a large down payment in IL?

StartingOver10 — Fri, 04 Jan 2013 13:22:22 GMT

Are you sure its an FHA product with no mortgage insurance?

There is such a thing as bumping the rate so the lender self insures, but usually you have a larger down payment (larger than 3.5%).

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 17:05:03 GMT

It is a special 1st and 2nd mortgage CHFA program in Colorado. The 1st is FHA and the 2nd is through CHFA, the housing authority. To go with the program that eliminates mortgage ins, you have to put 3% down. We are going with the CHFA program that includes mortgage ins as we only have to put down 0.5% and the remaining 3% is rolled into the 2nd mortgage along with closing costs.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 17:10:00 GMT

I should add the remaining down for the program with no mortgage ins is rolled into the 2nd CHFA mortgage along with closing costs. The program that eliminates the mortgage insurance requires a 700 credit score. We are going with the 0.5% down program that includes mortgage ins.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 18:45:56 GMT

Moving Forward, you are buying a new build in Colorado? We are as well

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 20:26:56 GMT

Yes! We are buying a new build in Colorado. It was finished in the fall of 2012. Isn't it so nice to move in a new home no one has lived in? We are so excited! We close mid Feb. When are you closing? I know you must be excited! We are meeting tomorrow to start the contract and get the house off the market. We put a hold on it on Wed.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Fri, 04 Jan 2013 21:36:08 GMT

Ours is currently a pile of dirt being excavated Tentative close is late April. We went under contract early November and finally got loan approval right after Christmas. Very excited but nervous something will go wrong between now and April, eeek!

Are you in the Denver area? If you don't want to share I understand

Re: Terrible fico score but a large down payment in IL?

Anonymous — Sat, 05 Jan 2013 05:17:05 GMT

I am in the metro Denver area. That is really neat as you got to pick the colors! That's wonderful. Ours is fully built and ready for move in. We couldn't wait for a full build. Our timetable is short as we must close by end of Feb...hoping for mid Feb. We looked at some still being built but they aren't ready until April. Slow go in the winter. Congrats!

Re: Terrible fico score but a large down payment in IL?

martinkk — Sun, 06 Jan 2013 15:51:10 GMT

We did something similar so I will tell you what worked for us,however, this was 25 years ago. In your situation, we went to a local bank, explained our situation, and showed how we could afford to pay for the house. They agreed to give us a signature loan instead of a mortgage loan, which we didn't qualify for, with the house as collateral for the loan. They had to take it before the board, but the board approved. It worked out really well. The signature loan was structured with a balloon note due in a year. At the end of the year, they just rewrote the loan with the lower balance. The idea was that in 3-4 years making timely payments, we would qualify for mortgage loan. But...there was a happy consequence. House note was $800 a month. Since it was a signature loan it was about 1/2 principal ans 1/2 interest. This is much higher principal being paid than on a mortgage loan. We ended up just asking them to continue with the balloon loans. We paid off the house in Nine years And some years the note went down. Side note...we had to pay our own taxes and insurance every year. No escrow.

Re: Terrible fico score but a large down payment in IL?

Anonymous — Sun, 06 Jan 2013 18:16:18 GMT

Wow, martinkk that is really neat!!! I would be so happy to pay the house off in 9 years but I know it isn't happening. My loan officer said that they rarely do those types of loans anymore since the housing market crashed as so many people weren't like you and didn't budget for the expenses that weren't escrowed and ended up foreclosing. It was mostly due to predatory lending as these brokers picked candidates that really only had the $800 and not much more. They could have if they streamlined their finances but they got all giddy over the initial lower payments and built their finances around it. I know there are some really good people on this forum that are ready to go but can't get financed because of their credit. I don't know if this is still a possibly for them or not if they look hard for the opportunity. They could try a local bank and see what they say but from what my loan officer said, those opportunities are long gone. Wow again! I know you are so happy right now in your home!