The End of NJ First Time Home Buyer Mortgages for Buyers Below 620 FICO Scores

by Steve Kappre, NJ Loan Officer

It was a nice run while it lasted, and over the last 6-12 months we were effectively able to put quite a few NJ first time home buyers into homes. As of March 15, 2010, NJ HMFA (Smart Start, Tax Prefund, and other options) will not allow a borrower to have a middle credit score below 620.

Credit Scores below 620Another tightening of guidelines will no longer allow buyers to use alternative credit and have no credit score. In the past, a lender could fund such a loan by placing 4 trade-lines that were not already on a credit report (i.e. cell phone bill, auto insurance, gym membership). Now if this is done and there still is no credit score, the loan can not be approved per NJ HMFA guidelines.

It is another blow in the world of mortgage financing.

There ARE some good buyers out there that have credit scores slightly below 620 that would make solid home owners. It is unfortunate that these guidelines restrict otherwise solid home owners. But the line has to be drawn somewhere. This makes the knowledge and understanding of credit scores and reports more important than ever!

With the end of NJ first time home buyer programs for buyers with credit scores below 620, it is more important than ever to work with a highly qualified, local mortgage loan officer. If your credit is marginal or below 620, call today for advice on how to raise your score to qualify for the Smart Start, Tax Prefund, or other HMFA program.

 

Credit Links

Credit Scoring - What Makes Up My Credit Score? (1 of 6)

Credit Scoring - Payment History (2 of 6)

Credit Scoring - Balances (3 of 6)

Credit Scoring - History (4 of 6)

Credit Scoring - Mix of Accounts (5 of 6)

Credit Scoring - Inquiries (6 of 6)

 

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

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Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail | NJ Loan Officer .com

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Treasury Mortgage - 550 Bridgeton Pike, Mantua, NJ 08051 - 1810 Springdale Road, Cherry Hill, NJ 08003

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This post has been included in New Jersey Real Estate News
Post is included in group: All About NJ Real Estate
Post is included in group: Gloucester County, NJ
Post is included in group: New Jersey Real Estate Experts
Post is included in group: NJ First Time Home Buyer
Post is included in group: South Jersey

3 Comments on The End of NJ First Time Buyer Mortgages for Buyers Below 620 FICO Scores

MAR
13
2010
815,127 Points Outside Blog Called Shot Master

Thanks for updte.  We learn a lot from Active Rain blogs.  Best Regards,
9:17am • #1
878,477 Points 75 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Steve I know it is better for both our businesses in the short term when more people can get loans but in the long term there are plenty of people that have gotten loans with marginal scores that should not be home owners.
9:40am • #2
288,781 Points 38 Featured Posts Outside Blog

Bill - There has to be a line. I agree. But I've had some pretty solid borrowers: LONG work history at current job, decent assets, etc. that just didn't understand credit scoring. I have buyers right now that got bumped out of this program that now need to work on their credit and may miss the tax credit. This works directly against the purpose of the credit - to get first time buyers to buy homes.
9:56am • #3

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Steve Kappre | NMLS# 217008 NJ Mortgage Loan Officer | 856-419-3561

Mantua, NJ

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