Can a down payment above 20% help compensate for a low credit score?

Hi Michael, We have special programs for credit scores as low as 560 and we can do conventional loans with a 620 score. We also have a very sophisticated CreditExpert system that helps us identify ways to increase your score if needed. Please give me a call at 970-672-0496 and I would be happy to do a full credit/loan analysis for you. Thanks, Corey

Michael, you likely have options with 20% for the downpayment as long as everything else falls into place. The rate will be lower due to the score but if you wait rates may increase anyway and you would not necessarily be any better off - plus house prices are increasing. A good loan officer will be able to review your qualifications and credit and explain your options - including sometimes making recommendations that could improve your credit. Recommend you find out now rather than guessing, it isn't only about the score, and perhaps there are some easy steps that you could take that will make a difference quickly. I can help if you'd like, pdumouchel@primelending.com (843-619-6025). Good luck!

Michael -- Great question!! You may not need to use the money you have saved for a full 20% down payment. A 620 would qualify you for an FHA loan, especially if your credit in the last two years is clean and you have good job stability. By putting 3.5% down and keeping the rest in "reserves" is attractive to a lender. Remember, that the guidelines for lending are ultimately designed to ensure we will be paid back and that you are successful in a Mortgage loan. Reserves show you can continue to make your payment if you hit tough times. The best thing to do is talk to an experienced lender to see the best way to structure a deal for you. There may be actions you can take with the money to improve your score also. Schedule an appointment with a Lender in your area - a REALTOR referral is an awesome way to find a good one. Best of Luck to you.

Michael,We do have loans available with a mid score of 620. There are options as well to qualify for down payment assist and/or grants. We are local in Colorado and can help answer your questions on loans and decide what is your best option. Please advise on purchase price you are considering. You can call Holly, my assistant at 303-840-3419 and start the process of finding the best loan suitable for you.

It's possible you could qualify now for a home.. most lenders require a 640 or above for FHA financing, however, there are lenders that allow for lower scores.. some as low as 580. but understand that it take so much more than a credit score to get approved. Job, income, debt to income ratios, derogatory credit, foreclosure, BK, Tax liens, judgments, etc.. all can result in a decline even if your score we 750.. if you want to know for sure if you can get approved than you should contact a LOCAL mortgage broker and apply with them. Do not use the local "Big" bank, or one of those 50 states internet lenders or nationwide lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

It saves you on some rate adjustments but the higher your score the better. 620+ you should be able to get a decent mortgage.