LOW FICO - NEED LENDER ASAP

[rfbs]

As of 3/16/13 -  EX: 639  /  EQ:  586  /  TU:  605

Single Mom, First Time Buyer.  Based on some of the posts I've read, I contacted several lenders who may have had options for low fico mortgages.  I thought I could secure an FHA with a min 580 FICO.  Despite the FHA requirements, Citibank advised I still needed 640, Wells Fargo 620.  I'm searching on-line, but feel like I am going in circles.  I am currently in a Lease to Own, for which the contact is up on 4/30/13.  The agreed upon price is $280K.  I am looking to put down 3.5% but no more than 5%.  I've paid off all but one collection on my credit report, which will be paid in the next few weeks.  I was in the low 500s a year ago, so I have made progress.  This is a sensitive situation for my kids, as I recently went thru a divorce.  I cannot move them again.  I have the monthly income to handle this, as well as, my DTI is minimal.  I simply need to find a lender, who is willing to give me a chance.  Would appreciate any direction.   Thanks.

[TanterBeans]

Call FGMC. They will do a 580.

[TanterBeans]

Also how old is that last collection? You might not want to stir things up.

[rfbs]

Thanks! Every lender said to pay and close them. My score dropped. Hoping a lender will view this as a positive. Can only hope!

[Anonymous]

Most lenders are not fico savvy when they say something will help, it actually hurts. The only way for a paid collection to help your score is to have it deleted.

I would look into NACA loans which approve not based on credit score. www.naca.com

Do you have any positive, open trade lines on your report? If not, you have another hurdle of finding a lender that accepts non traditional credit, such as rent or utility bills along with a lower fico score. Many lenders want to see at least 2 positive open trade lines on your credit report, such as a credit card and auto loan, with a min history of 12 mo.

[Anonymous]

NACA I do not believe will work in her situation.

She is in a lease with option to buy. While they are options for some, it is not something I would recommend any one signing and agreeing to, unless you are 100% sure you will be able to retain financing. Most want a deposit that you most likely will lose for not fullfilling your contract with-in the time allotted.

Another comment by poster is they can make the payments. Making payments and being qualified for the loan are different things. Your income and employment history will have to qualify.

Finding a lender with approval for a 580 is getting worse and worse.

[Anonymous]

You can always ask the home owner you have the lease option on to extend it

and give you a little more time to get your finances in place. One negative thing regarding a 

lease option to purchase is that if you do not exercise your option within the contract period you

will lose your option consideration which is usually credited to the sales price. However usually

most lease options if you gain equity in the property during the lease option period that is all your

money which can outway any lease option consideration you paid. I would highly suggest you

ask the home owner if they would be kind enough to extend your lease option for another 6-12 months

to give you time.

[DallasLoanGuy]

just because a lender says they can lend at 580..... you still have to overcome the reasons for the 580 in underwriting.

are you active in the credit forum? can get something deleted if you pay it?

[rfbs]

Thank you for the feedback.

[rfbs]

Thank you for the feedback.  I am working on a few PFD.  I will check out the credit forum as well.