Minimum Score of Conventional Loan with 5% Down

[Anonymous]

I've read as low as 640 but also have seen minimum as 680....any one have experience recently? 

I'm current improving score and fast. 

Mortgages scores are at 598 mid, regular fico 8 are around 660. I don't know how much mortgage scores will improve but i ran a simulator and 6 months from now my fico 8 scores will be 700-740 between the 3. 

I have quite a few late payments in last few years but no BK or collections and no late payments since this summer. I'm not sure if simulator takes into account agining of late payments but hoping my score improves just with time between last late payment.

Hoping to buy 5% down in Spring 2021 but wanted to know if I need 680 or 640. 

[NC_Mtg_Loaner]

I think you will find a lot of folks able to do this for you with credit score at 620, however, the cost of MI with a score that low is more likely to hike up the APR to a level where you may want to consider an FHA loan.  As long as the property qualifies you are likely to benefit by having the lower note rate thanks to HUD.

Of course it also depends on how quickly you expect to pay the loan balance down to 80% in order to remove the MI---should that be a goal of yours or not. 

[Anonymous]

Thank you! 

My only problem is the loan amount is likely to be higher than FHA limit. Likely $450k home price w/ 5% down. 

I may have to get comfortable paying higher cost of MI if that's the case but good to know it's "possible". 

What type of lenders would you suggest reaching out to for this?

[sxa001]

Those recent lates from this summer are going to sting for a little while.  What is your overall DTI?   In terms of lenders, there are a lot of lenders that will do conventional loans with a minimum of 620, I don't have any specific suggestions for you on that front.  I would say that it may be worth waiting even another year if you can and really working to get those scores even higher.  If you could get to 680 your rates are going to go down and you could save a couple of hundred a month on your PMI. 

I don't know what your income us, but with a score of 620 the rates+APR you can easily have a home payment of greater than 3k a month, that is a lot of money and a lot if you were to lose a high paying job and had to take a pay cut to come up with.  Check this estimator out to see what I mean in terms of the interest rates by score (https://www.myfico.com/loan-center/home-mortgage-rate-comparison/default.aspx) 

[Anonymous]

DTI with 3K mortgage assumed plus all other debts would be 16% front end, 29% back end. 

Income is $230k combined with wife. (140K and 90K). 

Do you think lenders that go to 620 would want more than 5% down? I can't seem to get a straight answer from any lenders nd I don't want them to run my credit/run through an app. 

I agree on the 680 target, im hoping we can get there by the spring next year but I feel the late payments are really draggin more score. My overall utilization went from 98% to now 20% but late payments holidng me back. 

Thanks

[Anonymous]

We are getting ready to close on a coneventional 5% down with a mid score of 635.   We couldn't go FHA due to student loans 

[Anonymous]

Have you tried goodwill letters with any of your lates? I have been working on my scores to be mortgage ready since April. I'm down to just 3 30 day lates...one from 2/20, 5/19, and 1/15. We are planning to start the process in March, which will give me a complete 12 months of no lates as this is something I've heard is what lenders want--at least 12 months of no lates. Some say 24 months. My middle score was a 655, but I just had a big jump in points on my fico 8s, so I'm hoping I'll see a jump there as well. I won't know till the end of the month though, but this was due to some recent lates being removed. Definitely try goodwill letters!

[NC_Mtg_Loaner]

Do a 15 year loan......it will have lower rate of MI regardless of credit score because of the amortization schedule and you'll be sprinting towards that 80% equity level and if necessary, in a year or two, refinance it to a 20 year loan or another 15 year loan when your score is fully rejuvenated.