JAMTAMASH

Minimum best middle FICO for mortgage?

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We will be discharged 2 years from BK this August. Our mortgage has been on time now also for 2 years. We are both in the 630 range on FICO's. We have each 2 credit cards and we have 2 car loans since BK so we do have some positive TL's. All are paid on time, utiliation is low. Could someone tell me what is lowest score that would possible qualify for a 100% mortgage. We need to move because we have outgrown our house. I know a 580 middle FICO could get you a mortgage before but now with the subprime market falling thru I figure the score scale has moved up.

Yes, I have challenged several things on our CR's and down to 1 each on my reports and 3 to 5 on DH report. His are all medical and just do not want to bulge. They were all included in the BK though and no outstanding balances.

Thanks for all your replies! :)++

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We will be discharged 2 years from BK this August. Our mortgage has been on time now also for 2 years. We are both in the 630 range on FICO's. We have each 2 credit cards and we have 2 car loans since BK so we do have some positive TL's. All are paid on time, utiliation is low. Could someone tell me what is lowest score that would possible qualify for a 100% mortgage. We need to move because we have outgrown our house. I know a 580 middle FICO could get you a mortgage before but now with the subprime market falling thru I figure the score scale has moved up.

Yes, I have challenged several things on our CR's and down to 1 each on my reports and 3 to 5 on DH report. His are all medical and just do not want to bulge. They were all included in the BK though and no outstanding balances.

Thanks for all your replies! :)++

Please define what "DH" stands for.

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620 is the new 580.

Look at the front page of myfico.com

Look at the table that shows "for a 216K 30-year fixed rate mortgage.."

The bottom score they show is 620. It used to go down to 580.

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You might be able to get a sub prime, however, the only thing hurting you could be time. Once your discharged, you still might have the stink on you. For instance, I was planning on doing the same, but some banks wanted a year after discharge and others wanted 6 months. I just refinanced with Countrywide at a prime rate and my scores are on par with yours. They were a little skeptical, but my lone to value ratio is excellent. In your case with a 100%, it might be a stretch.

Congrats on your discharge! Good luck and keep us posted.

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Have you had any collections since your BK?

There are some wholesale lenders that will allow the seller to "carry a 2nd" of up to 20% of the sales price of the home, so that may be an option

Charles

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Let's say that you qualified for a 1st and 2nd mortgage combo on your home loan. Typically they are either a 75/25 or an 80/20, (or if you have 5% down could be a 80/15/5)

Normally the investor would grant you/lend you the money for both loans. Let's say however that the investor allowed the seller to grant you/lend you the money for the 2nd mortgage. Then the investor is in 1st position and the seller gives you the money for the 2nd in the form of a loan. Thus a "seller second carry back".

Under most circumstances the lender will insist that the seller keep the loan for at least 3 years-then they can "demand" the rest of their money back. The longer the time period the safer the investor and the buyer are.

Hope that is clear. If not, ask again.

Charles

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Thanks for your reply Charles.

We have not had any collections since the BK. I have been paying medical monthly, cc's that we have obtained, 2 car notes all on time. If anything is ever late it is the utilities because they do not report the CR's.

We have had our mortgage now for 5 years FHA reaffirmed thru the BK.

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You will be able to get a decent loan then in August. It sounds like you have used the BK law wisely and are keeping financially strong/paying your bills and that is what the investors are looking for post BK.

RE: Utility bills. I intentionally pay them the last possible date. Drives my wife nuts but that keeps her from noticing the other stuff I do.

Charles

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A strong downpayment will more than make up for SOME credit blemishes.

The 20% down rule was well established by banks for a long time. Then things got "good" and everyone started giving money away like it was water and real estate was no longer cyclical. Now look what's happening to those "investments". Banks are getting their asses handed to them for getting away from it.

You'll still be able to get a higher than 80% LTV with problem credit, but you improve your loan sources by having as close to that 20% down as possible.

630 is probably good for subprime sources now. Best way to find out is to ask a broker though.

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Charles,

Do you know of any way to get a 100% FHA with $13K unpaid medical collections? No other unpaid collections... no lates in years... scores around 620-630. I have heard some speak of a "hardship" explaination letter to explain the unpaid medical. Others have said "don't bother me until they are paid" and yet others have said "don't pay them right now... will probably be required to be PIF at closing."

Any idea? I'd like something around $225-250K in Denver.

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It is not necessary for you to go with an FHA loan.

With your scores you should be able to go conventional financing and not have to pay the medical. AND not have to pay the FHA fee.

Charles

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Thanks for the reply.

I wasn't aware of an FHA fee. I was considering FHA because I figured it was a good way to a great interest rate. With my scores, I'd probably be looking at 1.5% higher for the 1st, and the 2nd would probably put me in a grave (racking up more medical) :)

Thanks again, Charles. I just haven't decided if now is the best time to buy. Prices seem to be really low right now with so many 1000s of homes on the market out here and interest rates are already climbing (according to myfico.com). Seems like a good time.

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It does look like it is close to the bottom of the price drop. There is a lot more interest in getting qualified to purchase homes in Florida and that was the first place that it seemed home prices plummeted.

This interest rate thing is odd at this point. The core index for conventional fixed rate mortgages is the 10 year bond and it has been going up and down a lot lately. For the industry major moves. They don't get translated in major changed to the consumer every day, but 2 or 3 days each direction do make a difference.

Charles

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