Most people today think in order to refinance or buy a home they need to have high credit scores and perfect credit history. In todays mortgage world loans are available for those who have low credit scores and some blemishes in their credit history.
FHA will allow borrowers to have fico scores below 600 and can even have had a bankruptcy as long as it is over 2 years old. You can also have small charge offs and judgments they typically need to be paid before you are able to close.
FHA also has second chance programs for those who had bankruptcies and foreclosure due to loss of job or income. You will need to document the events leading up to the event and show at least a 20% drop in income. If you are able to show this you may be eligible to buy a house or refinance after just 12 months.
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USDA is a 100% purchase programs that will allow borrowers to have credit scores as low as a 640 and in some cases 620. This program also allows for minor blemishes on credit, although you may have to pay off collections and judgments before closing.
VA loans are for our veterans and are 100% loans for either a purchase or a refinance. Again in some case scores can be as low as a 580. If you are looking to refinance your VA loan you may not even need to have an appraisal.
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Lastly for those who have scores and credit that prevent you from buying you may be able to take certain steps that will put you in a position to raise your score and in some case remove old collections and judgments from your credit reports. Typically this is done with a credit counselor who can help you with your past due accounts and develop a game plan to put you in a position to buy a home.
Thank you.
Craig Thibeau
Senior Loan Officer
210 South Main Street
Middletown CT 06457
Ph 860-334-1354
NMLS # 398576/Company NMLS #117273
craig@northeast-mortgage.com
www.northeast-mortgage.com
