My co-worker and I were talking and she wants to buy a house but she says her credit score is like 502, as low as it can go right! But she has a good job (now) and is working to clean up her credit report. There’s a condo she wants to buy but she’s afraid she’ll get laughed out of the loan department with her bad credit. Is it possible for her to get approved?
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8 Responses to 'Can you get a mortgage with a really really low credit score?'
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She is a bad credit risk, so naturally, her rates will be higher, but yes, there are companies who will mortgage her condo.
Does she have cash to put down or is she looking for one of those money down?
Also there is a huge difference between a house and condo, main thing the your condo is bound by the by laws of the board they can tell you what you can and can not do, plus their is maintenance fees, and if any common areas need to be replaced IE roof etc you will be assessed a fee payable that year
It is possible to get a loan with a credit score as low as 500, but you will pay the price in interest and will have to put down a large payment.
Your best bet is to try to get your credit score in the mid 500’s or even better if you can get it above 620. It will be worth the wait to save on interest.
mortgage companies are rather aggresive try
Generally she is going to have to put down at minimum 20% before any one will even consider it, then will also have a high interest rate to deal with.
I would suggest spending three months cleaning up her credit, this is easy to do by disputing the descrepancies on her report and following up every thirty days. She might just get enough cleared up to get in the 620 range!
I did this exact thing when I bought my house! Got my credit in two months to 680 from 610 by disputing all the bad things and having my report checked while they were off.
Yes she can. But with all of the problems in the sub-prime mortgage business right now, she will have to have a large down payment and her interest rate will be high until she proves that she is responsible and can refinance.
She really should concentrate on improving her score before she attempt to purchase a home or condo. It will save her a ton in the long run.
I can tell most of these answers don’t work in the mortgage industry.
Minimum 20% down payment on the home and her rate will be over 10% on a 2yr arm (fully amortizing/ no interest only option) with a prepay on it (if allowed in your state). She’ll also have to sit down with a mortgage broker, who given her case will kill her with closing fees. That is also assuming that her income can cover the house payment, homeowners fees, taxes and other debts she owes.
If she can do that 20% down there is a chance, but in all honesty she should wait, clean up her credit and get a decent downpayment ready.
The bank is the first place that will tell her no. It will help if she has money for a downpayment or is buying a home for less than it is worth. I recommend Smart Choice Mortgage. They do business in most states and are your best opportunity for someone to say yes. Check out the free evaluation form at the source website and a Smart Choice loan officer will contact you within 24 hours. Good luck.