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Can you qualify for a conventional mortgage with 5% down, a FICO score of 675 and a DTI of 25%?

My fiancee and I are buying a home in Fulton County GA. Bank of America has told me that I need a median score of 680 to qualify for a conventional loan. I have not had much time to shop around, but I really feel that there has to be a lender that will allow us to stay away from an FHA loan with 5% down and our DTI being so low. Please advise and thank you in advance.

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  • cam
    Lv 4
    1 decade ago
    Favorite Answer

    I purchased a house at age 23. I had a DTI of about 40% a FICO of about 650 and put nothing down. I purchased the house through a mortgage broker and got a 2 year locked, 30 year variable loan at 8.99% through a company called NovaStar. After 2 years they sold our mortgage to a company called Saxon that was just ridiculous, they raised our interest rate to 13.99% and constantly held our payments to accrue interest.

    I went to my credit union and was surprised to find that they have very relaxed requirements as compared to banks. I refinanced my house to 4.99% (with 3 points that I also rolled into the mortgage) for a 30 year fixed mortgage. My payments are the same as it was for the previous 8.99% except now we have an escrow for insurance and taxes.

    I cannot emphasize enough, the benefits that come from mortgaging a house (or establishing a car loan) through a credit union. Some are hard to get into but ask around, if any of your family members are enrolled, you can as well, in addition you may have eligibility through your place of work. I recommend looking up a credit union, seeing what they have to offer, then using that to compare to what Bank of America has to offer.

    One last thing, banks offer rates that are usually best case scenario, for instance, BOA has a 3.99% rate, but if you apply you may end up being offered a 6% if you don't qualify for the lower one. At credit unions they will give their lowest rates to everyone that qualifies.

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  • 4 years ago

    With a 70,000.00 income you should pay off your debt first, then save more towards your downpayment. You want at least 20% so you don't pay mortgage insurance which is hard to get rid of. Use your head and don't get into more debt. That reasoning is what put our country in this situation in the first place. Never let a lender tell you what you could afford. 41% is astronomical. GET IT DOWN FIRST. The housing market isn't going up this year so you have some time to pay off what you owe and save a little first.

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  • Reena
    Lv 7
    1 decade ago

    You can get a boost on your credit score fast if you pay off a credit card that has had a balance on it for a while.

    Spend the cash and pay off that card and bring it to Zero.

    Keep it there until after you get approved.

    All credit cards should either be at Zero or at least not have more than 30% of their limit used. Bring them to that level and your score will go up fast.

    Your Debit to Income is great... just keep looking. There are more banks out there than BofA.

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