What Fico Score do Mortgage lenders look for?

Anonymous · ‎05-28-2007

Does anyone know?

I have a 583,618,630.

Is this strong enough?

Thanks

fused · ‎05-28-2007

edj8 wrote:
Does anyone know?

I have a 583,618,630.

Is this strong enough?

Thanks

You should be able to secure a mortgage with your scores, however, you are unlikely to get a favorable rate or terms. When are you thinking about buying?

What do your credit reports look like, any negative items? Perhaps, we can be more helpful if we know what's on your three reports.

girlie · ‎05-28-2007

this info should help.

Banking regulatory agencies generally designate a subprime borrower as having one or more of the following credit history characteristics: two or more 30-day delinquencies in the past 12 months; one or more 60-day delinquencies in the last 24 months; a collection-related legal judgment, foreclosure, repossession, or account charge-off in the past 24 months; bankruptcy in the previous 5 years; a high default probability as measured by a Fair Isaac Co. (FICO) credit score of 660 or below; or a debt-service-to-income ratio of 50% or greater.

Tuscani · ‎05-29-2007

Scores are not everything.. Many factors come into play.. DTI, money down, amount to finance ect.

Do you have any unpaid collections?

Message Edited by Tuscani on 05-29-2007 06:12 AM

Anonymous · ‎05-29-2007

@Tuscani wrote:
Scores are not everything.. Many factors come into play.. DTI, money down, amount to finance ect.
Do you have any unpaid collections?

Message Edited by Tuscani on 05-29-2007 06:12 AM

Tuscani is 100% correct here.
@I got my last mortgage @ 6.47 in 2004 with 1 late on current mortgage and a couple of CA's, looking back my score never came into question at all. It was right around 600.

The risk to the lender was minimal IMHO because I had 100K in equity.

Anonymous · ‎05-29-2007

girlie wrote:
this info should help.
Banking regulatory agencies generally designate a subprime borrower as having one or more of the following credit history characteristics: two or more 30-day delinquencies in the past 12 months; one or more 60-day delinquencies in the last 24 months; a collection-related legal judgment, foreclosure, repossession, or account charge-off in the past 24 months; bankruptcy in the previous 5 years; a high default probability as measured by a Fair Isaac Co. (FICO) credit score of 660 or below; or a debt-service-to-income ratio of 50% or greater.

Thanks, this is helpful.

Anonymous · ‎05-30-2007

I am a mortgage planner.

To answer your question: It depends on the home loan you are looking for. Some lenders (subprime for the most part) use the middle of the three scores to set your rate and the amount they will loan you percentage wise.

Also 1 30 day late on your mortgage is worse than 3 30 day lates on a credit card in a MORTGAGE LENDERS eyes.

If you are in an area where an FHA loan is available, then the score doesn't matter as much as your actual credit in the last 12 months. FHA loans are quite different than they used to be. They are much easier on the property now than they were in the past. Having said that with your scores unless you had a Chapter 7 Bankruptcy within the last 2 years or a foreclosure within the last 3 years, your odds for approval on an FHA loan are pretty good. FHA is at or near conforming rates, with much lower PMI and a MUCH better alternative than subprime....if you are purchasing you would either need 3% down or you could use a gifting company (these may not be available much longer, so if you do need to use one, I suggest finding a home ASAP). Make sure you find the right lender, some give up if the "automated underwriting engine" denies the loan. Packaging the loan up for a "manual underwrite" with explanations so the undewriter can see why the loan officer thinks the file is good enough for approval works about 70% of the time.

If you have compensating factors you may qualify for conforming loan. The compensating factors would be as follows:

Low debt ratio (this is the amount of your monthly liabilities divided by your income...if this is below 30% to 35%, that is a compensating factor...only count things on your credit report...Car payments, credit cards and housing expense (P and I, taxes and insurance)
Reserves: This is money in the bank. IF you have 6 months of mortgage payments in the bank (checking, savings, stocks, mutual funds, vested retirement, etc) this is a strong compensating factor.
Money down/Low Loan to value: Loan to value is the amount you are borrowing verse the value of the home. Example: $160,000 loan value is $200,000, the loan to value is 80%. Anything under 80% is considered compensating as well as you can avoid PMI on a conforming loan.

(*edited*) ....I hope this helps you.

Message Edited by haulingthescoreup on 03-02-2008 06:01 AM

Anonymous · ‎05-30-2007

Thanks for the response.No unpaid collections!Bankruptcy reported in May 2006 due to medical bills, I reaffirmed my vehicles and kept up payments on time.My Fico score 1 year ago was 432 and today it is 618.

Anonymous · ‎05-31-2007

I'd hold off on getting the house. As long as you stay on top of things, your credit score has nowhere to go but up...in stark contrast to the housing market. Why not wait six to nine months...by then you'll probably add 25 to 30 points to your FICOs and save a couple hundred a month in interest payments.