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I am really wanting to take advantage of the $ 8,000 homebuyer tax credit but I am currently trying to rebuild my credit which isn’t where I want it to be. I currently have a score of 655 and was wondering if anyone could tell me what kind of interest rate that could get me on a mortgage?

5 Thoughts on credit score and mortgage rate?
  1. Reply
    sassy25
    February 2, 2014 at 5:25 am

    zero. FHA loan requires a score of 680 and 3.5% down
    conventional is 750 and 20% down.
    Even if you could find a mortgage you will never close by the 11/30 deadline. That is only 10 weeks away.

  2. Reply
    loanmasterone
    February 2, 2014 at 5:28 am

    Many lenders have different requirements. With a 655 score there is a possibility that you might find an underwriter that has lenient underwriting guidelines.

    In order to find out the type of loan programs you are qualified for you will have to fill out a loan application, with a mortgage broker, which you can find one in your local telephone book.

    Make sure this mortgage broker or mortgage banker is able to do government loans such as FHA and VA loans if you qualify for one.

    He will fill out this application, which takes awhile so grab your favorite beverage and sit down. Once you have completed the application, he will run your credit report which will have your credit scores. These credit scores will determine your interest rate.

    The amount of your monthly debt payments you are required to pay as per your credit report and the amount of mortgage you can take on based on your income will determine the amount of house you will be able to purchase.

    When you speak with the mortgage broker you will need the following documents to complete the loan application, there will be others, but this will get you started.

    #1 One month of pay stubs for each person that will be on the mortgage.

    #2 Six months bank statements from each bank in which you bank as well as statements from any 401K from you place of employment.

    #3 Two years of federal income tax along with the W-2 that match.

    Once he has all that he need to do he can then issue you a pre-approval letter so you can purchase a home. In this pre-approval letter will be the amount of house you are qualified to purchased.

    Once he gives you this pre-approval you may now find a real estate agent to find yourself a home or he might have a referral.

    Now make sure before you get your pre-approval you and your mortgage broker go over all your options as to the mortgage programs you qualify for, the interest rate, monthly payments.

    If you are getting a FHA, fixed rate, two loans to eliminate PMI like an 80/20 or one loan, if you are qualified for and approved for a 100% loan.

    You should select the loan that best suit your financial condition at the time. That could be an adjustable rate loan. It could be a fixed rate loan for 5 or 10 years and then adjust. Some adjustable rate mortgages only adjust once.

    Make sure your mortgage broker explain all your options so you may make an intelligent decision.

    What might be good for one person might not be good for you, in other words just because your friends and all your real estate buddies are telling you about the great fixed rate they got, your financial situation might call for something else.

    So select the best option for you and your financial situation.

    You should also get a Good Faith Estimate (GFE) which will indicate the cost you will have to pay for getting this loan. It will also indicate the amount of your down payment.

    Once you have found a home the real estate agent will then prepare a contract for you and the seller to sign.

    Your mortgage broker will now order an appraisal to show proof of the property value.

    The mortgage broker might ask for additional information or documentation, don’t get all up tight this is normal, just supply the information or find the documents needed.

    After the appraisal has been completed you will be called by your mortgage broker to sign your loan docs so you can take possession of your new home.

    Before signing any loan docs make sure they say exactly what you and your mortgage broker went over when you decided on what mortgage program was best for you.

    I hope this has been of some benefit to you, good luck

    “FIGHT ON”

  3. Reply
    Voyage Home Loans CA
    February 2, 2014 at 6:07 am

    As long as you have 4.5% to put down, you can get an FHA loan with as low as a 620 credit score. I just completed a purchase for a client with a 620. The one thing they will take a look at is your credit history. You should have no current delinquencies or collections. If with in the past 24 months you will need to ensure that they were due to extenuating circumstances ( ex: hospitalized, or something that will not likely happen on a regular basis) The interest rate you can obtain will be roughly be 4.875% – 5.125% for a 30 year fixed. You can however get a lower rate if you wanted to use discount points to buy your rate down. Good luck

    Josh H
    Voyage Home Loans
    Sacramento CA

  4. Reply
    FreeRateUpdate
    February 2, 2014 at 6:22 am

    Short, sweet, and accurate. Today, with your qualifications, you could get a 30 year fixed mortgage rate as low as 4.875 percent with regular points fees through any lender offering FHA loans.

  5. Reply
    daeve930
    February 2, 2014 at 7:03 am

    As you can see from the variety of answers, nobody really knows. Why don’t you call a couple lenders and see what they say? Where I work we still lend to people with that score, but your rate will be higher than if it was 700 or 750 or more.

    The most important thing you can do to help your credit report is pay on time. That aspect has the greatest impact on your score, and the second thing is the percentage of available credit being used. The length of credit is important too so if you close accounts — which will negatively adjust your ratio — make it the newer account rather than the one you’ve had for 20 years. Get rid of finance company accounts if you can. If you bought furniture using the store’s credit plan or bought a car from a used car lot (not a new car dealer who also sells used cars) those may be considered finance companies.

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