Low credit score, big down payment what kind of interest rate?

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Me and my husband both have low credit scores, in the mid 500’s. We will be having a 25% down payment for a new mortgage with the sell of our current home. We’ve been approved for a loan with a 8% interest rate. Its the first place we’ve looked, is it possible to find 7%? Any advice would be appreciated.

4 Comments
  1. Reply
    I Have Parasites
    May 19, 2011 at 9:21 am

    I bet you are unable to get much lower than 8 with those scores. MY score is horrid also like 550, but my wife’s is 810, our mortgage interest rate is locked at 6.7%

  2. Reply
    Turbo Baby
    May 19, 2011 at 10:14 am

    Question, is the low credit score due late payments, collections, or lack of credit? The best advice I have is to apply a an institution you already have a relationship with. (Credit Union, Bank) I do not know how much equity you have in your home and if that would be the source of the 25%down.
    If you have more equity than 25% and closing costs, ask if the rate can be bought down, and get a Good faith Estimate so you can compare the difference between the two scenarios

  3. Reply
    Etta P
    May 19, 2011 at 11:07 am

    I would try a national lender like Wells Fargo, and if your mortgage payment history has not been the reason for your score within the last months and you have a good explanation for adverse credit then you may be to get alittle lower. Have you tried FHA? But those scores are bad in this market. Hope this helps

  4. Reply
    Casey C
    May 19, 2011 at 11:18 am

    The real question you should be asking is, how much of a down payment do I need to make to be approved? Unfortunately with the recent turn in the market, you may have very little available to you. You can visit my website at CaseyCasperson.com. I am a loan officer for Chase that is one of the few lenders that can still help with a credit score like that. You can either call my cell phone or complete a prequalification. i’d be more than happy to help. Best of luck.

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