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Low Fico Mortgage Approval

Auto Loans for ANY Credit Situation. Immediate Response.
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Established Member

Low Fico Mortgage Approval

I have low Fico mortgage scores 499, 541, and 535. I found a lender that prequalified me with 10% down and a 5.5% interest rate.I have 33% credit card utilization which I plan on paying the balances off this week. I have LOTS of baddies on my credit report. 3 charge offs (2 from credit cards and 1 from student loans) and several late payments (mainly from student loans). 2 of the charge offs were there when I got the prequal back in May. The last one was being charged off but hadn't hit my credit report at the time. They are all paid but still showing charge off. For some reason they all updated this month too (July). I went under contract on a house June 27th. I have 30 days to get my ernest money back. The lender that prequalified me is now saying they aren't sure whether I will be approved by underwriting or not. No matter what questions I ask he just keeps saying "there's no guarantee". He hasn't sent it to underwriting to give time for some of the things I've paid to reflect on my credit report. Should I go get my check back before it's too late? What are the chances of me getting approved by underwriting?

 

I should also note that I have 5 cards in good standing never late low utilization and I had a mortgage loan before that was just closed out in June due to me selling the house. I had never missed a mortgage payment either.

16 REPLIES 16
Member

Re: Low Fico Mortgage Approval

No two underwriters are the same. No one knows why they make the decisions they make, and the lender that qualified you should know what the underwriters take as high risk or not.  Do not pay all credit cards to 0 - bad idea, keep your utilization between 1-9%. Do not take my word for it, but if the charge offs are from years ago then you should be fine as long as they report as paid. 

Message 2 of 17
Established Contributor

Re: Low Fico Mortgage Approval

I could be wrong but I think someone is pulling your leg.  I don't think any mortgage company is going to approve a loan with those scores.  I believe the lowest would be 580 for that to happen.

Message 3 of 17
Established Member

Re: Low Fico Mortgage Approval

I've actually found a few (not many) lenders that can do an FHA mortgage with scores as low as 500 but you have to put 10% down. Above 580 and it's only 3.5% down. 

Message 4 of 17
Member

Re: Low Fico Mortgage Approval


@Anaki902 wrote:

I've actually found a few (not many) lenders that can do an FHA mortgage with scores as low as 500 but you have to put 10% down. Above 580 and it's only 3.5% down. 


You are correct.

Message 5 of 17
New Visitor

Re: Low Fico Mortgage Approval

Hi. Which lenders have you found that take 580 credit scores??
Message 6 of 17
Established Member

Re: Low Fico Mortgage Approval


@800Future wrote:
Hi. Which lenders have you found that take 580 credit scores??

Carrignton Mortgage is one i know of. 550 in fact for USDA.

Fico8 Ex 585 Tu 579 Eq 576
VS3.0 Ex 594 Tu 599 Eq 606
As of 24July17
Message 7 of 17

Re: Low Fico Mortgage Approval

does it have to be usda when that low?

Message 8 of 17
Established Member

Re: Low Fico Mortgage Approval

no they also do va at 550

Fico8 Ex 585 Tu 579 Eq 576
VS3.0 Ex 594 Tu 599 Eq 606
As of 24July17
Message 9 of 17
New Member

Re: Low Fico Mortgage Approval

Freedom Mortgage is who I send all of mine when I need FHA <580 with 10% down.  Have not used Carrington, but I believe they do as well.  

Message 10 of 17
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