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FHA 203k loan with 580-600 credit score.

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FHA 203k loan with 580-600 credit score.

Hi in may of 2016 my fico 8 equifax scire was 625
When i got my car through my credit union i also went on a trip to Florida and got 2 new credit cards. It tanked my score down to 550s by July on my fico. I also had about %85 Utilization at the time
Just paid down alot on my credit cards down to 23% utilization overall with no more than 20% on one card still waiting for the new balances to report.
My myfico mortgage scores as of 08/18/16
EQ:545 TU:580 EX565
Fico 8: EQ:569 TU:611 EX:595
That is with over 80% UTI
I also paid $800 down on my car loan
And $300 on my peraonal loan

My lease is up on my townhome in November.
My rent is $1,100. My gross monthly income is $4,300. With 1.5 years on the same job. My DTI is 21%, i have had one 30 day late payment in the last 2 years while i was in the hospital. Last collection is from 2013. Only have 2 collections. One charge off. All old debt has been paid except one collections. I found a fixer upper house i want to buy with 5 acres for $40,000
I have been looking into the FHA 203k loan where i can include up to $35,000 for repairs which would put a total $75,000 mortgage and would be well below my affordability. My only problem is credit scores will my UTI going from over 80% down to 20% increase my mortgage scores to a 580?
And is it even possible to get the mortgage with the 580 score?
Established Contributor

Re: FHA 203k loan with 580-600 credit score.

You might see a small bump...the mortgage scores seem to move slower...I personally would wait a bit even if a bank did the loan at your current scores..there's some that will...if everything else in your profile pass underwriting....I mentioned waiting cause with scores that low, typically a FHA 203k or b would mean bringing more money to the table for lower scores..I think the wording of 3.5% down is what catches everyone a lender can call for more down basing it off your middle score and full file. Typically with a mortage middle fico of 565 is where you stand if your EQ:545 TU:580 EX565. The recommended on a loan is at or above 580 on the middle score with a max LTV at 96.5% and scores between 500 and 579 is a max LTV of 90%.if you're comfortable with at least coming withh 10% down factoring in reno cost on the may be golden but that interest rate and fees would be killer.

Fico 8 starting scores 09/27/15 EQ: 646 TU: 622 EX: 668 5 collections 1 PR reporting across the board
Scores 06/30/16 EQ: 685 TU: 699 EX: 695 1 collection now reporting on EQ and EX and 1 PR on EQ
Current scores 11/4/2016 EQ 688 TU: 705 EX: 736 No collections no PR/Judgements Finally Clean
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