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My Credit Score

by Anonymous
(Arizona)

My husband and I have a combined credit score of 597. Is it even worth applying for a loan or should we work on our credit for a couple more years and then apply?

Answer....

How was your combined credit score figured? Can you give me what each of your credit scores are?

Jeff

Her Response.....

I think I used a formula a family member gave me. My credit score is 594 and my husband's 620.

My Response.....

Thank you for giving me your scores.

Normally lenders will use the lower of the two borrowers (in this cases yours) to determine the credit worthiness of the loan.

With your lower score at 594, I assume there have been a few things in the past that caused the low scores. Or perhaps you are new in making a name for yourself with credit.

I would think you may be a possible candidate for an FHA mortgage. In today's lending environment, FHA has the most relaxed credit requirements. However they do currently have a requirement of 620.

Sometimes the FHA underwriter can make an exception, especially if your husband is the primary wage earner, and does not have more that two 30 days late payments in the last 2 years.

You just have to try. Since I know very little about your credit file, I cannot tell you for sure. However, when I was in the mortgage business (I'm not any longer) I would have taken your loan application and let the underwriter make the call.

Hope this helps.

Jeff


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My Credit Score
by: Alice

This really helped me!!! I was wondering if it was possible to get an average score by combining my score with my husbands. Now I know, thank you so much!

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Bankruptcy and Credit Scores

My husband filed for bankruptcy 3 Years ago, he has maintained a great rental history and trying to get his credit score back, right now it's about 660, my credit is in the poor 577 can he qualify to buy a house anywhere in California? Or will we be renting forever?

======ANSWER======

Hello There,

I really like it when people come by and ask such good questions.

In regards to your husband qualifying for a home loan, there are more factors to consider besides just his credit score and rental history.

While it's true, having a 660 credit score and solid rental history is a very good thing, there are more pieces to the mortgage puzzle.

You may want to take an look at fha home loan requirements for some other helpful information. The one thing you will need to keep in mind is the debt to income ratio. This page talks about it.

If your husband has sufficient income to buy the house he may be able to do so without you being on the mortgage. For FHA loans the maximum house payment is 29% of his monthly gross income.

The way they figure income is the total money earned for the last 12 months. Add them all together and divide by 12. So let use $60,000 divided by 12 which equals $5,000 a month.

So 29% of that is $1,450. This is the maximum house payment you would be able to afford to include principal, interest, taxes and insurance (PITI).

Use this handy mortgage qualification calculator to help you out with this.

With your score below 620, you very likely would not be able to apply for the FHA mortgage with him. 620 is the lowest score they are taking right now, although sometimes they have some exceptions.

So if your income needs to be calculated into the monthly payment to qualify, you may have to work on your credit to get there.

Hopefully you find this helpful.

Kind Regards,

Jeff Ragan




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Lowest credit score that can qualify for a home purchase

by Martin
(USA)

I have one question here. What is the very lowest credit score that I could possibly have and still be able to meet the mortgage loan qualifications for a new home purchase?

======ANSWER=====

Nice question here. Sadly, the lowest credit score lenders are allowing these days is no where near what it used to be. But when you think about, it is better for us all when the credit score requirements is higher since this indicates your ability to repay the mortgage.

At one time, I remember that people could buy a house with scores as low as 500. This was a sub-prime loan and these were the loans that began the fall of the banking system back a few years ago.

Because people with such low scores could buy a house, this created some serious problems in the mortgage market and thus the deflating of our property values.

Now it requires a 620 score to get a VA or FHA loan which has become the new sub-prime loans. If you had a 720 score you were the borrower who could get the lowest rates and best mortgage deals. Now even that is not enough, many lender are looking for 740 scores or better.

So hopefully this answers your question. Feel free to visit my page on VA loans since I can see you must be a in the service now.

Here's a couple of links to consider, credit repair VA Loans

Best Regards,

Jeff


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Lowest credit score
by: Laisha

Great question, I was wondering the same thing!

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