Holy guacamole! BIG news!

[timotiger]

I'm a mortgage officer and hopefully and can provide some help. FHA requires a 580 mid score. However, most end investors (these are the actual lenders of the money such as Chase, Wells Fargo, BoA,Wintrust,GMAC,etc) require a 620. There are some scattered end investors that will do a loan at 580 but they are hard to find. On FHA, you get the same rates as if you had a 780. It doesn't matter and the lender is protected by PMI (mortgage insurance) which you pay.  Also, some local banks portfolio their own paper. These are typically short term ARM's. They will only do them if they have an appetite for this kind of loan and if you have a compelling reason like a large down payment, or you do a lot of other business with that bank. These have become more rare over the last 5 years due to industry collapse. Finally, FHA loans only require 3.5% down payment and your mortgage insurance can be rolled into the loan amount. Additional costs, such as closing cost, can be negotiated to have the seller pay and raising the sales price.

[Anonymous]

Congratulations.  what kind of interest rate did you get?

[jandj80]

4% is what we got. Which I think is fabulous, considering the credit history we have had. The mortgage officer above detaied things nicely. I didn't have trouble finding a lender that accepted the 580 midscore, and the down payment was still just the 3.5%. In fact, the bank will do a loan with any credit score if the buyer has 10% down. The loans are sold out to a much larger bank, but the requirements we had to meet were actually set by the larger bank that buys the loan, not the individual bank that we went through. Good luck everyone. Appraisal is not scheduled until late January, but I will update with any information that I get. I know many of you are looking to do the same thing in the near future so I will post any and all information I can. So far so good. Inspection is done, all the loan paperwork is signed, and now we just sit while we wait for the appraisal. 

[Anonymous]

Nice way to start 2013, congrats!