(Closed) What does your credit need to be??

posted 7 years ago in Home
Post # 3
Member
1090 posts
Bumble bee
  • Wedding: October 2011

all require a down payment now. A FHA loan requires the bare minimum of 3.5% down.

Credit scores need to be in the good range. I think that is around 700 or higher. If one person has below that, but the other is higher that is usually ok as long as the other person is not below a 650 probably.

We are in the process of buying, but Im sure it all depends on where you live too! 🙂

Post # 4
Member
7431 posts
Busy Beekeeper
  • Wedding: October 2009

@chittychittybanebane: That’s not true. Some states and/or counties have programs where you can get 100% financing, but you have to meet certain requirements.

I would say at this point in the economy, they won’t even look at someone less than 700, but the higher the better. Loans are really tough now, but if you can meet the criteria, interest rates are great!  Good luck!!

Post # 5
Member
3942 posts
Honey bee

@weddingbells44: It really depends on where you are and the banks, but I believe a credit score of 720 was the minimum when we bought. FHA minumum is 3.5% down, but there may be other programs out there. I hear its getting harder and harder to be approved now though.

Post # 6
Member
1090 posts
Bumble bee
  • Wedding: October 2011

@MrsSl82be:  We talked to several different lenders and banks and we were told that there was only one program out there for first home buyers with a zero down payment. You had to apply for it, and make less than 70k a year between all borrowers. That could be a midwest thing though, like I said all areas are probably different with what is available.

Post # 6
Member
10366 posts
Sugar Beekeeper
  • Wedding: September 2010

Over 700 for your credit rating. If it is only 700, you will be required to put down a much higher down payment than someone with a higher rating in a traditional loan.

The whole point of the housing crash was that they are no longer doing no-down-payment loans. That’s a huge part of what crashed the market. Like the PP said, FHA requires a minimum of 3.5%, but the more the better. You have to pay extra for insurance on the amount you put down less than 20% – it’s better to have the 20% to begin with.

To me, if you don’t have a 20% down payment, you probably shouldn’t be buying a property. That signals that you likely don’t have substantial emergency savings, and that you will be stretching to afford a house at all. Being house rich and cash poor in this economy isn’t the best idea.

(and what really sold me on a substantial down payment is looking at how much interest is paid to the bank over the course of 30 years. It’s roughly equal to the cost of the home with today’s interest rates. Scary. More down = way less interest paid!!)

Post # 7
Member
3176 posts
Sugar bee
  • Wedding: May 2011

My friends just bought a house 2 months ago with a very poor credit rating. It was below 650. He has horrible credit and she had no credit. They didn’t need a downpayment because they had a VA loan which doesn’t require one, at least were we are. They bought a pretty shoddy looking house for $120,000. How they got a loan I have no idea…

Post # 8
Member
921 posts
Busy bee
  • Wedding: June 2011

In Canada  a minimium of 580 but you are going be paying crazy interest rates and probably having to go with a B lender.. and you need a 5% dp for first time home buyers.

Post # 9
Member
7431 posts
Busy Beekeeper
  • Wedding: October 2009

@chittychittybanebane: Yeah, in my area you have to be lower income to qualify (which makes no sense, because at a certain point you couldn’t afford to buy around here anyway???), but there were actually certain ones where you could complete a course and then you could get grants that didn’t have to be paid back. I’m sure all that money is gone though.

 

Post # 10
Member
3942 posts
Honey bee

@crayfish: I agree that 20% or more is best, but sometimes its just not possible. You know what the house and rental prices are in the Boston area, its crazy. For us to save 20% on a $300K home, well…it never would have happened. So we put down what we could (much less than 20%), and we pay extra on our mortgage each month. If it all goes according to plan our mortgage will be paid off in 21 years.

Yes, we pay PMI but even with that (and insurance, taxes, etc.), our mortgage payment is $75 more a month than our rent was!

Post # 11
Member
708 posts
Busy bee
  • Wedding: January 2011

One other thing to add to PP. When you apply for a morgage with you Darling Husband, they take the lower of the 2 scores. So, if you have execellent credit and his is so-so, they will take his, not the average of the 2. Yours doesn’t even matter at that point. I was not pleased when I found this out.

There are however ways to help fix your credit score. I made a ton of calls, and my score went up 50 points! Which helped us get a better rate.

Post # 12
Member
42 posts
Newbee

@magilnyc: Bummer. My credit score is great, but SO’s is terrible. We are’nt married or even engaged yet, but have discussed marriage in the next year or two. I’m really concerned once we get married it’s going to be impossible to get a loan for a house. Would I be better off trying right before we get married with only my score? And how did you up your score by 50 points? SO is enrolled in a consumer credit counseling service that is paying off his credit cards, and so far two are paid off, and two more should be done at the end of the year. What else can he do!? 

Post # 13
Member
4546 posts
Honey bee
  • Wedding: September 2010

@sajones7461: Would it be possible to get a loan with just you on it? Darling Husband and I ended up doing that because though both of our credit scores were very good, my income couldn’t count on the loan application. So the loan is in his name but the house is in both our names. Just another possible option 🙂

Post # 14
Member
708 posts
Busy bee
  • Wedding: January 2011

@sajones7461: Actually it is Darling Husband that had the good credit score! We couldn’t just put the house in his name because his salary alone did not qualify for the loan. As for my credit score increase… I had a collection agency call me 4 years ago for a cable bill that wasn’t paid because I had moved to another state and never got the bill. Once the agency called me, I paid it right away, but 4 years later it was still on my credit report. My lender told me that if I called the credit agency they may be able to take the line off my credit report. After much pleading, they did! You may also want to contact a company that specializes in credit ratings, as they can look at your history and tell you how you can improve your score. Sometimes, opening a line of credit can increase your score, who knew! Also, anytime you have your credit run, your score goes down. This is especially true for store credit cards. If you are thinking of getting a loan in the next couple of years, stay as far away from store credit cards as you can.

Post # 15
Member
5497 posts
Bee Keeper
  • Wedding: September 2010

We had a credit of right around 680 each. USDA and State bond don’t require anything down, but they do have restrictions. I think the FHA requires 3.5% down…and that can be magically “gifted” to you by someone…or so they told us.

Hope this helps. We are new to the process so I don’t know a lot about the different loans.

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