My husband and I were preapproved for a VA loan, through New American Funding, even though my credit score is below 620. My husbands is in the 640s. We are first time buyers.
Before the preapproval, we were working with lender to get mid score to a 620, but a rent-to-own option was brought up to me by a friend, who is also a realtor. She thought I should ask my lender about this. I did and he said he thought we could actually do a traditional offer, with a 45 day escrow, even with my low credit score. He said he "didn't think it would be a problem". I was surprised, I thought he would say we would need to wait until my score was higher, so this all feels a little surreal.
We put the offer in and it was accepted. We are supposed to close September 1. Now, I am so nervous that we will not get final approval if my score doesn't improve enough. Mid score is at a 569!! We are working with a credit repair agency the lender recommended, but not sure if we can get my midscore high enough before closing.
Do you think the loan can close even if my mid FICO mortgage score doesn't reach a 620?
Thank you!
*Other info about our finances
-We make around 100,000 a year, combined (employment history - my husband 12 yrs, me 2 yrs as a teacher, previous career for 10 yr)
-We have around 90,000 in IRA rollovers (accessible as reserves)
-Our DTI is low, with no car payments, no credit card debt (we have 3 credit cards, all with less than $20 balance)
-Credit is mostly bad because of irresponsible payment history (not paying student loans on time, paying late on ccs, etc)
-We also have one judgment (paid off) and a lien (state taxes) also paid off
We are disputing baddies on my credit report, with the plan to take disputes off before closing.
