Husbands credit score is 640 - Denied a home loan....?

mine is a 760 but i do not work at the time. i just had a baby 7 wks ago and have a 19 month old. we can handle our bills fine and now rent so we figured why not try to buy. we can totally afford a mortgage of 700 a month which is out there b/c of all the bankruptcys but now we just got denied from a repo dear hubby had 3 yrs ago. the bank said pay it off and then they might consider us.

if one bank denies us will all banks deny us?

and isnt there a such thing as really 0 money down?

he was saying oh then we'd have to at least have 2k bc of closing costs and so on.


10 Answers

  • 1 decade ago
    Favorite Answer

    You will not be buying anything until you have repaid that car debt. Screwing them for 3 years is a long time, surely you can see why they would worry about lending you money, you refuse to repay loans, for extended periods.

    Presently there are no 0 down loans, FHA had a loophole that was open for a few days, but it has been closed.

    You need at least 3.5% down and some money to pay the closing costs, 2k is really conservative.

  • 1 decade ago

    That repo needs to be paid. Until that is gone your credit gives indication you will default on an a loan instead of work through the problem. An underwriter does not want to see that.

    0% down is not as common these days. Sellers can pay for some closing costs but you still need some cash. If you would work you could save a nice down payment in just a few months.

  • 1 decade ago

    You will have to shop around to find a bank that will take you on , but with the open balance on the repo, the first loan officer was most likely correct and that you will need to pay off the balance before anyone will extend a mortgage.

    And no, there are no zero-down loans anymore. Expect to have at least 5% of the purchase price in cash to cover down payment and closing costs, and it will probably run closer to 7 ot 9% total unless you can get the seller to pay part of the closing costs.

  • Anonymous
    1 decade ago

    Is the repo a judgment or just a collection/charge off?

    If it's a judgment you will have to pay it off or at least make payment arrangements and document a payment history of 6-12 months.

    IF it's a collection/charge off then it will be the underwriters discretion - meaning just because one u/w turned you down does not mean another one will. If you are dealing with a bank just remember that it's like going to McDonald's, you get what they have on their menu at their price. As a broker I have access to 40+ different lenders.

    Source(s): I'm a mortgage banker/broker
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  • Anonymous
    1 decade ago

    Lenders are looking at more than credit score, there is a whole range of factors considered to assess the risk. My strong advice would be to speak with the lender, ask them what it was that caused you to be declined.

    FYI I was declined once, I had a very high score, it turned out that they found someone associated with my credit file that was considered high risk - it did not make much difference to my score, but it stopped me getting a mortgage.

    If you can not get a mortgage you can also try "Rent to Own" or "Rent to Buy", you start by renting for a few years, then buy later .. once the mortgage market has improved You can find out more here

  • Anonymous
    1 decade ago

    Pay off your debts, save some money for a good down payment on a conventional loan (FHA loans with 5% down charge high interest) and THEN buy your home. That's the true American way, otherwise you are meant to rent.

  • 1 decade ago

    u have a good credit score but u have no income coming in just your husband, If you had income coming in it will truly help getting you that home. They want NO ugly credit now or should say no risk on any credit now days, U will have to pay off the Rep for sure they can come back on you in later days, they have that right.

    u will have to have at least 4 months of rent in the bank (savings) to show you have back up money for emergency purposes.Banks are scared now and are truly in troubled, try a credit union.

  • 1 decade ago

    Yes...a repossession is considered a major financial event....if you find a bank that will approve you, you'll get ripped off in the interest rate.

    That fact hasn't changed in years.

    No, there is no such thing as 0 money down...those days are gone.

  • 1 decade ago

    the problem is that any balance owed on this repo could be taken to court and a judgment and a lien then placed on the home that is why it must be paid. Very few underwriters out there will let that slide

  • wizjp
    Lv 7
    1 decade ago

    Open unpaid 3 year old repo?

    No one is financing till that's clear.

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