What Does 580 + 43 Equal?
MORTGAGE APPROVAL!
Credit Scores of 580 or higher ... and Debt-to-Income Ratio of 43% or less ... mean FHA Buyers can obtain Mortgage Approval. Other qualifying factors such as:
- Employment/Income Stability
- Down Payment
- Acceptable Credit History
- No major credit events, etc.
... are also required to meet or exceed current guidelines.
This is good news for First-Time Home Buyers. And anyone else that may have suffered some minor setbacks on their credit ratings (but otherwise have contributing financial factors in good shape).
While other Mortgage Lenders were still requiring Credit Scores above 640 on FHA Loans, I've been offering the above Mortgage option for Buyers in the 580 to 639 Credit Score range for quite some time. Many of my clients have taken advantage of this niche product.
The key to these loans being made, approved, and paid back in a timely fashion is:
Borrowers are held to a firm debt ratio of 43% of Gross Monthly Income. It's also helpful if Borrowers demonstrate and retain cash reserves equal to 2 months of their housing expense (total payment).
Borrowers are held to a firm debt ratio of 43% of Gross Monthly Income. It's also helpful if Borrowers demonstrate and retain cash reserves equal to 2 months of their housing expense (total payment).
If a Borrower's income is adequate to pay and cover their bills, they'll do the right thing and pay back their loan on time, regardless of their middle Credit Score. The middle Score is a measurement. It's like a mirror. It reflects the client's recent management of their Debt and Credit.
I'm not diminishing the importance of a Credit History and reflective Credit Scores. But keeping a client's monthly payment obligations within a manageable percentage (43% or less), has proven to be a more important and reliable criteria for Lenders. While the underwriting for a Mortgage with Borrowers possessing Credit Scores of 580 - 639 may be a little more restrictive, these Mortgages are good, viable options for Home Buyers.
If you've heard that your Credit Scores are "too low" to earn a successful Mortgage Approval, know that may not be true. It's possible that you might not be "shut-out" of the home buying process after all.
Before delaying your home buying dream, find out where you truly stand. Reach out to me.
If you hope to:
- Avoid renting another year
- Buy before Interest Rates rise
- Own your own home
- Buy before home prices rise further
... Contact Me. The more quickly you inquire and ask questions, the more quickly you get on-track to buy ...
* Hoping to Buy, Build, or Refinance a home in the Chicagoland area? Contact Me Today! I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
I can be easily found at:
Direct: 815.524.2280
Cell/Text: 708.921.6331
eFax: 815.524.2281
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