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600 Score and Need Conventional Mortgage - HELP

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Emma1137
Valued Member

600 Score and Need Conventional Mortgage - HELP

Hi All, I have been rebuilding my credit for most of this year after multiple medical collections from an auto accident last year.  I have been able to get all but a few medical collections removed and am going to have to hire a lawyer for thise last few since they won't seem to do anything for me.  I have 4 credit cards that I pay on time and 99% off each month.  They have a 3-4 year history.  I have had no mortgage for almost 15 years (which has hurt me)  and just recently got a car loan but it has just started posting to my history.  I can't seem to get my mortgage version of each score (version 2, 5 and 4) up over 590 to 600 no matter what I do.  My FICO 8 is between 625-640 with each CRA.  I have no debt except my recent auto loan and I have an income of about $100,000 gross yearly.  I have a prequal for an FHA loan for their max ($317,000) but have recently moved to Asheville and this FHA limit is too low for what I need.  I would have to come up with over $150,000 for the home I have found. I know my credit will start to go up within a few months of my auto loan posting a positive history but I need to get my home situation resolved soon and really don't want to wait for 3 or 4 months or longer. I will be living with 2 aging parents and a toddler and have found a good multi-generational home that works which hasn't been easy.  Does anyone know of a way to get a quick score boost to these mortgage versions of one's score?  I have found that I can boost my FICO 8 much faster than I can these other versions but, so far, the lenders I have been working with are using these scores exclusively and not the version 8 score.  A couple use the middle score and some consider all 3 CRA scores but all lenders use these versions for sure -- they have been nice enough to share the CRs with me.   Also, does anyone know of a lender that will use a score under 620 for a conventional loan?  Any advice would be greatly appreciated.

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5 REPLIES 5
StartingOver10
Moderator Emerita

Re: 600 Score and Need Conventional Mortgage - HELP

Are you able to put down 20% of the purchase price?  If so, then you don't have to worry about PMI, only the interest rate. 

 

If not, that is your issue with conventional loans because to get a LTV at >80% means you would have to be approved for PMI.  FHA makes it seemless but for conventional loans it is a separate approval process by one of the private insurance companies.  Here is a link to give you an idea of the cost based on score and LTV  https://www.mgic.com/rates/rate-cards.html

 

There aren't many PMI companies and the lender you choose selects which PMI co they will work with for your loan. 

Message 2 of 6
Emma1137
Valued Member

Re: 600 Score and Need Conventional Mortgage - HELP

Thanks for the message.  Yes, I can put down 20%.  I really don't want to pay PMI.  I just can't seem to find a lender than will loan on a credit score under 620....  Many want to to a HP not believing that I really know what my score is.  They want to pull my score before they tell me anything and I don't want or can afford those hits to my score. 

Message 3 of 6
StartingOver10
Moderator Emerita

Re: 600 Score and Need Conventional Mortgage - HELP

Who are you speaking to - bank reps or actual mortgage bankers?

 

The big box banks don't have the trained mortgage reps they use to have in place. IMO they are just application takers and have a process to fulfill. I haven't seen any that can answer questions well unless you get into a jumbo mortgage, than they use different reps that are trained (JME). 

 

If you go to a good mortgage banker/correspondent lender, he or she will be able to answer your questions and find portfolio money (potentially). A good LO will answer your questions without a HP and then when it is application time, they will have to pull your score.

 

Just a comment, do you have anything on your CR that you can fix to increase your score? Utilization perhaps or pfd a collection? You might want to check out the rebuilding forum, some people have managed to increase their scores significantly in a short period of time.  

 

I will pm someone to you to try.

 

 

Message 4 of 6
ezdriver
Senior Contributor

Re: 600 Score and Need Conventional Mortgage - HELP


@Emma1137 wrote:

Thanks for the message.  Yes, I can put down 20%.  I really don't want to pay PMI.  I just can't seem to find a lender than will loan on a credit score under 620....  Many want to to a HP not believing that I really know what my score is.  They want to pull my score before they tell me anything and I don't want or can afford those hits to my score. 


The question that you should be asking lender prospects is "what are your credit underwriting guidelines and fees?". No lender needs to pull anyone's credit to answer that question. Now if you ask them whether or not YOU can be approved for a loan, it is only fair that you allow them to pull your credit. Conventional at 620 middle score [not considering the WHY behind that score] is very difficult. That said, there are lenders that would do a portfolio loan with a 205 down payment but even they will want to review your entire credit profile before giving you a response that is specific to your situation.
Message 5 of 6
Emma1137
Valued Member

Re: 600 Score and Need Conventional Mortgage - HELP

I've spoken go a mortgage broker that my realtor suggested and she was pretty stuck on the 620 score.  What I'm looking at now is about a $400K loan with 20% down.  I also spoke to a lender at Kondaur Capital in California.  The person I spoke to was very helpful and quick and was the only lender to rush a prequal letter for me for a multiple bid situation on a property in Asheville.  It was something that needed a little rehab so was lower a $300K offer.   But she can't do this larger loan without a 620 since it's conventional as FHA is limited to $317K in this county.  They keep the FHAs in house but not the conventionals.  I also spoke to a loan originator at Cardinal Financial and he was helpful without a HP but said he would need a 620 too.  I'm not sure if I'm speaking to the right people.  Should I be looking for mortgage brokers only since a portfolio loan is really what I need?  As for cleaning up the report, there are a couple of things that I think I can get corrected fast.  I don't know for sure it they will increase my score enough though.  It seems that the last few PFDs I received didn't really result in increases even though they were recent accounts.  I don't know why but I only saw a couple of points increase. My biggest moves seem to be when my CC balances change.   It does seem that if I leave even a 10-15% balance on my CCs I get a 5-7 py decrease yet when I pay the off 99% my increase is only 2-3%.  I don't get it.  I left about 20% on one card last month and I saw a 8 pt drop on my fico 8.  I don't know if it changed my mortgage versions that much since I can't afford to order full credit report and get the corresponing versions every time something happens.

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