Often times people are hesitant to apply for a loan and look for homes because they feel that they are not credit score worthy. Even without perfect credit you can still get into a home.
The truth is 54% all of the closed loans in the last month had a credit score somewhere between 600 and 749. Generally anything over 720 will ensure the best possible pricing, but with today’s exceptionally low rates an 1/8th of a percent in rate shouldn’t stop you from considering home ownership entirely.
Often buyers will be turned down at one bank and give up entirely. Having been a lender for 4 years, I know this is not the best move. There are many times where a lender like Bank of America or Wells Fargo may not have a product that is available at a Midwest Heritage or a Veridian Credit Union.
For example, just last week – a lender I work with wasn’t able to do an FHA loan on a manufactured home in Monroe, Iowa. So we passed it off to another lender in Urbandale who could. Then the person we passed it off to wasn’t able to do an FHA loan for someone in Johnston, Iowa with credit under 620 so we passed it right back to the first lender. Then neither of these two lenders could do reverse mortgages – so we put them into contact with another independent lender over on the south side of Des Moines.
The fact is, lenders have so many products available that you need a realtor who knows lending inside and out to be sure that you are ending up with the best product for your needs. The last thing you want to do is let the first loan denial be a reason to stop your search. Even if your credit score is under 600 some lenders have options available – though they may require some additional items on your end. Such as a larger down payment, accepting a higher rate or even agreeing to a variable rate loan.