OPTIONS EQUAL OPPORTUNITY

  Let's talk a little bit about the options if your credit score is less than perfect...say less than a 680.  Did you know that your own bank may turn you down for a mortgage loan with this type of credit score?  That's not much of an option. Sad but true.  As a mortgage broker, one thing we know about credit scores of 680 or below is that there are many, many, opportunities to assist folks with their financing needs who have a credit score in the 600's.  The fact is 53% of Americans score less than a 700.  Of that percentage about 30% are in the 580-699 score grouping. So 1/3 of consumers are in potential home buying position.  I know I don't want to write off 33% of the buying public-so the great news is that since I am a mortgage broker I don't have to!

                                                             boston.com

  This latest series of blogs is all about options-so you might ask, what type of options do you have for the under 680 homebuyer?  Some of it does depend on your credit score.  Over the past year we have worked hard to find some good options for the borrower whose score is below 640.  There are any number of companies that are marketing for those lower 600's borrowers but the question we asked was, how difficult is it to get the loan to close?  How many hoops can you make people jump through to get the keys to the castle? (And believe me, if a credit score is under 640 it would be easier to break into Fort Knox than to get mortgage money with some of these investors.)

                                                        revmocat.blogspot.com


  I don't understand why a lender would do that-offer loans to a buyer that may be a bit banged up credit wise and then torture them through the process. I sometimes think having one's teeth pulled without Novocaine would be easier than closing a loan with some of these guys.  In any event this has been the ongoing quest for us-something akin to the search for the Grail, finding a company that can deal with these situations in a relatively timely manner.  Earlier this year we added two investors that said they could deliver on FHA and USDA loans with scores below 640.  We have run several loans through both companies and they are as good as their word.  One we have had excellent success with is lender that has no overlays. If you recall an overlay is a rule that a lender adds to the basic rules of a loan -the rules set out by USDA, VA, HUD or Fannie Mae. In other words if the loan meets the FHA criteria and goes through automated underwriting and is approved-nothing more will be added to the conditions by the underwriters. Talk about less stress! With either of these lenders it is safe to assume that the interest rate will be higher than the best market rate. As we have discussed previously, there is more risk.

  In addition one of our premier investors has lowered their requirements for conventional financing to a minimum credit score of 620.  I think it is safe to assume that the interest rate will be significantly higher for this borrower, but there it is-an alternative to FHA if the borrower has a 5% down payment.

  This news doesn't mean the only requirements are a credit score of 580  and a pulse and you will get a mortgage.  There are still other hurdles that have to be scaled-such as job stability, the reasons why the credit is lower in the first place-but it does mean more chances for more people to own a home.

  So there it is.  Another example of options equaling opportunity. The opportunity for more people to share in the dream of home ownership- and that, my friends, is a beautiful thing.