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Charles, can you pull another rabbit from your hat?


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Hi Charles,

I'm in the process of relocating to Northern, VA for a new job. I am interested in purchasing a townhome and my Fico Scores from PrivacyGuard are: (I understand these aren't "true" scores)

EX: 658

EQ: 608

TU: 580

The blemishes on my credit are an open medical collection from 2000 in the amount of $200 and a Sprint cell phone collection for $550 from 2002. The other blemishes are lates from credit cards and students loans all which are now consolidated and current since 2003.

Any advice on what I should do get a loan with fico scores under 620?

I am tired of renting and would secure a pre-approved loan before I relocate in July.

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Other than just getting the basic documents together, you really don't need to do anything, with one exception. If you have not been paying your rent by check, I would get a verification of rent filled out by the apt complex, as you will need to show your rental history for the past 24 months.

Understand that this first loan may not be with the best rates/terms, but notice that I said "May". I would suggest that you not pay off the collections until asked to by the Loan officer/broker, because a payment now will bring the DLA more current, which will make your scores drop. Not fair or logical, but reality.

There is a good chance, that since you have 5% or more to put down, you can qualify for a conforming loan, that will have a little higher interest rate attached due to your under 640 score limit. The assets really make a difference.

I think you will find what you are looking for in the under 250K price range, so your debt to income ratio should be good enough, for either conforming or non-conforming.


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