What are my chances of qualifying for a mortgage loan?

Question

I currently am in the poor credit range due to just being able to get on my feet financially after my divorce last year. My credit score from the 3 reporting companies are 557, 564, and 592. I have no loan debt whatsoever now, and own my vehicle outright. I've been with my employer for 6 years and have rented where I'm at now for 20 months. I live in the state of Michigan. I applied with my bank last week and just found out today that i was not approved because of one late payment in May of this year. Also.......should I bother with prequalifying, or just hopefully attempt to get preapproved?

Answer 1

We do pre-qualifications for loans.  Here is one tip: If you have credit cards, used them. make small purchases, like the grocery store. Then, pay them off immediately.  That will raise your credit score.

The 564 middle score may be high enough, due to the extenuating circumstances. I have been able to do loans that local banks have turned down. I would need to look at your file. Feel free to email me, if you want help.

Answer 2

You have to get pre-qualified to even been shown a house by a realtor. They aren't about to waste their time showing you houses if you can't get approved and you will need a pre-approval letter from the lender stating how much you are approved for.

Those are pretty low scores and right now things have gotten tight when it comes to lending. I'd wait for at least a yr and try to build your credit up.

Good Luck!

Answer 3

You need: 20% down and a manually underwriter. Stop slapping things to the wall and see if they will stick.

Alternately, you could find someone who will owner finance you.

Answer 4

With such a low score, you're going to have a tough time qualifying.  By all means try to get pre-approved, or you're just wasting your and the seller's time making an offer.

Frankly, your best bet would be to wait another year or so, get your credit a little better, and try again.  Do NOT repeat that missed payment, though.  As minor as it seems, with an already low score, it hurts.

Answer 5

I would assume that the mortgage you are asking for fits what your income qualifies you for. A general guideline is 3 times gross yearly income. However, banks are ultra careful right now on who gets credit. My advice to you would be to try to raise your credit score and get rid of the black mark of the late May payment by getting a credit card with a low limit (eg. $2,000), buy something on credit, and take 6 months to pay it back with regular monthly payments. Having no debt can be a bad thing, too.

Answer 6

a prequalification really doesnt mean anything ,your real eatate agent can do that . its basicaly in idea of what you can afford..a preappoval is what matters. a commitment letter is a have to in order to even put an offer on a home in some cases.(some realtors wont even show you a house until you have one).you have bargaining power with a commitment letter .and just because you apply for a loan with your bank and they appove you and give you a commitment letter does not mean you have to buy a house . all a letter is ,is a letter telling you  that they are willing to provide you with a mortgage and under what terms.

Answer 7

FHA may do your loan but most lenders want your score at 580 middle of three or better. Look at your revolving loans andpay any revolving down to 30% of the limit and your scores will come up