Mortgage Loan Turned Down For Past Credit Histories?

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I am applying for a mortgage loan and I know the system has changed because of the many foreclosures now. However I was turned down for past credit histories. I will admit I have about 1400 in hospital bills from back in 2003. Does this mean I can’t be financed with anyone at this time or should I try another lender. My credit score is 601 and I am applying for a FHA loan. I have been so discourage but don’t know if I should presue this thing or not. I have all my money to put down on the house but if its not my season to purchase I have to accept. I know people with worst credit than mine have gotten homes and had no problems. Is it just me or this is normal sometimes please someone answer that knows. Thanks for all your help and advice.

Can I get a mortgage loan with a good interest rate, and a excellent
credit score with no money down. Thanks for the help.

tosa
So you dont really need a down payment with a score of like 800

24 Comments
  1. Reply
    tkahrs12122
    January 23, 2011 at 5:04 pm

    Low score, unpaid debts and tightened credit guidelines. Be honest “Would you lend someone with your history Money?” No harm in continuing to look. Keep saving for the downpayment. The larger that is, the better you look to lenders. Good Luck

  2. Reply
    Andrea T
    January 23, 2011 at 5:27 pm

    Do you still owe the hospital bills? If so, why not pay them off? Talk to them first and get it in writing that they will remove the bad information from your credit report.

    It won’t hurt to give it another year, keep making on time payments, and increase your credit score. Besides, it doesn’t look like housing prices are going anywhere but down right now. Next year, you’ll have a bigger down payment, a better credit score and lower prices on houses. That’s a win all the way around.

    Good luck.

  3. Reply
    Danie
    January 23, 2011 at 6:16 pm

    I recently applied just to see where I stood and if I could purchase after doing some of my own credit repair. Based on the information I was given by fha loans, you cannot have any late payments in the past 12 months or no new collections. So if you have either I would first fix any new collections in the last 12 months and start from the date of your last late payment in order to estimate when you can be approved. I was also informed with the mortgage industry being the way it is, if your score is under 620 it is becoming very hard to get approved esp if you have those other things working against you.

    I know its hard just keep your head up… According to my mortgage company I should be ready in the next 6-9 months. Just do as much as you can your season will come.

  4. Reply
    stan c
    January 23, 2011 at 6:37 pm

    Your best bet is contact a mortgage broker and just be straight with them.

  5. Reply
    Tracy V
    January 23, 2011 at 6:40 pm

    your credit score isn’t that low for an FHA loan.

    if you go to a really good mortgage broker, he or she will help you clean up your credit. you may end having to pay that hospital bill but I bet you can get away with paying 500.00 full and final. It’s an old uncollected debt.

    find a different mortgage broker and see if you can get some help with this matter.

  6. Reply
    Faranak G
    January 23, 2011 at 6:42 pm

    the best way to approach this situation is to try and raise your credit score before applying for any loans or mortgages.there are many articles on the Internet which can help you with this .also try this web site for useful tips
    http://www.houseofrapidcreditrepair.com/

  7. Reply
    Perla
    January 23, 2011 at 7:36 pm

    All mortgage loans are not created equal. If you are looking for a loan, you have probably discovered the array of loan types and options. It can be confusing forthe first-time borrower and even for those with more experience! Here, we will discuss the different types of loan options, and how they work.

    http://mortgages-finance.awardspace.com/

    First, there are two main broad categories of mortgage loans: government loans (FHA, VA, and RHS, or Rural Housing Service loans) and conventional loans (all other loans). In general, government loans have low or no down payment requirements for the purchaser and are easier to qualify for than conventional loans. They are also guaranteed to the lender, which allows the borrower to obtain more favorable loan terms.

  8. Reply
    Mike Q
    January 23, 2011 at 8:26 pm

    Your 601 score is too low…
    You can use credit repair agency to fix your credit – for example this one – http://creditreport.undonet.com – They can clean lots of bad stuff from your credit report – and do it much faster than yourself, so your credit will go up fast.
    After credit repair you can get the loan with minimal interest rate.

  9. Reply
    Greg
    January 23, 2011 at 8:33 pm

    of course you need to shop for one

  10. Reply
    mi_gl_an
    January 23, 2011 at 8:45 pm

    i got one for my first mortage, there was no money down but the closing costs are still alot of money

  11. Reply
    mazziatplay
    January 23, 2011 at 9:39 pm

    Yes you can get 100% financing but the rate will be slightly higher than if you had a minimum down payment.

    Remember, even though you will not have a down payment, there are still closing costs to pay although there are program that will finance up to 6% of those and a motivated seller can also contribute a small amount towards your costs as well.

    In order to access the most competitive interest rates you would only need about 3% of the sales price for a down payment and that can come from a gift from a family member, a secured loan, sale of an asset upon which you can document the value and transaction, or a grant from a nonprofit home buyer’s assistance program.

  12. Reply
    almazing1331
    January 23, 2011 at 10:28 pm

    yes you can, you will have to pay more per month and have a longer amortization. this will kill you on interest as you are not paying very much on the principal for the first several years.
    I believe it also cost you more in closing costs as well.
    Ideally you want between 5 and 10% down this makes all the other financial aspects easier to carry.
    However if you must go without a down payment, you are able to.
    Here is a good trick, If you really do have a great credit score get a line of credit. begin transferring money from line of credit to bank account, dont touch your bank money.
    keep paying back line of credit, and transferring.
    Before you know it you have your 5% and are paying MUCH less interest as a line of credit interest rate is way lower.

  13. Reply
    lendermark1
    January 23, 2011 at 10:42 pm

    Absolutely. There are many ways to structure 100% financing. The best way is to do an 80/20 piggy back mortgage so you avoid mortgage insurance.
    http://www.lendermark.com/8020_mortgage.htm

  14. Reply
    kittylove
    January 23, 2011 at 11:15 pm

    Call your local Mortgage Companies. Yes, you can get a mortgage.

  15. Reply
    barraganf2001
    January 23, 2011 at 11:43 pm

    Anyone with an excellent credit score and a Debt to Income Ratio of 45% or less will do just fine in getting a loan.

    Check out this site they have information on 100% financing, a short video “9 Steps to Home Ownership” and much more….

    http://www.firstmeridiancapital.com/100%Financing

    It helps to have a free appraisal, which they are willing to pay for.

  16. Reply
    thetoothfairyiscreepy
    January 24, 2011 at 12:41 am

    of course! you just need to talk to a mortgage advisor/loan officer and explore the options available.

    also, be sure to choose a realtor to work with!!!

  17. Reply
    mzfilly
    January 24, 2011 at 12:47 am

    Uh, YEAH.

    In this market, you don’t even need to have an excellent credit score.

    AND, you may not even have to pay your closing costs, if you can get a sellers concession!

    HOWEVER, you will NOT get the best rates when you do 100% financing. Think about it… you are not putting any of your own money into a very expensive investment. Who’s to say that you won’t just walk away from it when the going gets tough? So, the investors calculate that risk into higher rates.

    If home buying becomes any easier, lots of us in the business will be out of jobs! LOL!

  18. Reply
    mockingbird
    January 24, 2011 at 12:48 am

    With an 800 credit score, you can get almost anything you want! As long as the payments fit your debt-to-income ratio (and with a very high credit score, you can push the limits there a bit) you will qualify. An 80/20 will allow you to avoid mortgage insurance. Your rates will be higher, but if you’re in an appreciating market, you can always refi in a year or so.

  19. Reply
    www.JBienesRaices.blogspot.com
    January 24, 2011 at 1:30 am

    The answer to your question is SIMPLY put YES YOU CAN!! but of course it takes more than just your fico score to really tell you what interest rate you qualify for or what loan you qualify for.

    The only drawback of getting a 100%, as others already mentioned, is that your interest rate will not be as good as if you would have put down something for the down payment. If you dont have the money for the downpayment, make sure you have at least enough for the closing cost and some reserves in your bank account.

    Good luck

  20. Reply
    matchew318
    January 24, 2011 at 2:00 am

    There’s a mortgage for everything. You can get two mortgages like a 80/20. But the better you look in the eyes of a bank the better they’ll treat you (rate and terms). With a credit score above 720 you can get a loan just on your SS#, name, address. It’s called a no doc loan and they’ll take your great history as your only asset and rate you against that alone.

    There’s always money to lend. And Real estate is one of the safest investments for a bank so they’re more lenient because the house is the main collatteral in every loan.

  21. Reply
    pengy2482
    January 24, 2011 at 2:35 am

    yes, you can get a mortgage with no money down and excellent credit… however it really depends on your debt to income ratio. if the lender doesn’t think that you will be able to pay your mortage payment then of course they will not approve you. your debt to income ratio should be about 45%… so you really need to provide more information. i have learned that anything is possible in real estate, but everything is a case by case situation.

  22. Reply
    Molly R
    January 24, 2011 at 2:56 am

    YES!!! You can get anything you want with a great credit score!!! The rates really depend on what you want to do. Brokers are set up to find these deals for you. Just make sure that you do not get taken advantage of in the process. If you have a great score your closing cost should not be that high. Also you want to make sure you are really getting the lowest rate you qualify for. Ask the broker if they are getting paid by the lender also. If they are you are getting a higher rate then you qualify for. You can email me if you want to ask more questions.

  23. Reply
    parkerindy
    January 24, 2011 at 3:11 am

    Sure, FHA and VA loans (if you are a vetran) exists for first time homebuyers and no / low money down lenders. Just realize you may get in for little down but your mortgage will cost more on a monthly basis. To mitigate the risk to the lender, you will be paying for Mortgage Insurance that protects the lender (not you) for the possibility of a foreclosure down the road. The mortgage insurance is scaled to the size of your mortgage. A good example of Mortgage insurance premiums on $ 130,000.00 mortgage in Indiana breaks your payment down as follows:

    Principal Interest: $ 679.00 month
    Escrow(taxes/insurance) $ 245.00 month
    Mortgage Insurance $ 65.00 month

    Total payment $ 989.00 month.

    Before jumping into the no money down game, think about being patient, saving that 20% and trying to slide into a conventional uninsured loan.

    80/20 piggy back loans are risky and I would avoid. This is a shell game and I do not advise you play it.

    Hope this helps

  24. Reply
    W. E
    January 24, 2011 at 3:35 am

    Are you kidding – you will be hounded for your business. Congratulations on having a Impressive Credit Score – Some things to Consider when you buy a home.

    With your credit = you could qualify for a 103, 107 ltv – What that means if you needed 100,000 your could get 103,000 to 107,000 loan amount to cover closing cost etc.

    1 loan with your credit will be roughly 6.88 rate with no MI – with 1 lender I know of – possibly 7.0 with rates going up (this is an estimate only ok. Some company’s will try a 80/20 to get you at the 100 percent financing – so you will not have MI – What is this you wonder?

    MI is Mortage Insurance, this insurance is for the Lender. It is not Home Owner Insurance that you get on your home. This insurance insures the lender that if you do not pay for your mortgage, the insurance covers the loss.
    FHA loans have MI included, Conforming A+ borrower’s loans have MI included, but the rates are better starting in the mid to high 6’s (with rates going up.) The more money you borrow – the higher the rate normally. There are alot of factors involved. The rate I quoted you (the 6.88) has the MI in the rate. That gets you away from having 2 payments, the rate is good, and not a 80/20 (2 payments). Look into a fixed rate, 30 yr – or 20 yr – even a 40 or 50 yr if you need it. If you work with a Broker, he/she can submitt your loan and rate shop for you, using his credit – that has only been pulled once. You may even want to talk to your bank and see what they offer you.

    There are many programs out there, this is just a few – ok. There are interest only loans, pick-a-payment programs, where you have the option of 4 payments)

    With all loans, the seller will have some out of pocket expenses (unforuntally)
    1. The appraisal has to be paid up front, at the door. Appraisers will take a Check / Credit Card Payment. Some will work with your lender and collect at the door, but only if the person is serious, and signs that he/she is resonsible for the appraisal, if they back out.

    2. You will need to bring in a Home Owners Insurance Binder, of coverage for your home purchase. Some lenders wants to see the first year paid. This insures them that you can # 1 afford it, and that # 2 their investment to you is covered with insurance.

    Other things to consider.

    Decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now – (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 – This is just a estimate – ok –

    It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help – especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??

    Talk with a broker, a broker underwrites for many company’s (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a “hard” pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.

    Try to find someone (broker) that will pull your credit one time, and submit your loan application to company’s that will go off his credit report. By the way, a loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). This will tell you the up-front closing cost (etc) associated with your loan. This is a estimate only – not the final – but it does help you figure things out.

    Good Luck, and if I can help in any way check out my web site, for links to all the credit reporting agency’s and other useful information.

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