Can I buy a home with a 650 credit score?

I make $57000 a year now. I have no money for down payment/closing costs - maybe $3000. My credit score is 633 currently. Haven't been late on payments in 3 years. I have 5 credit cards in which 2 of them are near the credit limit. Would I be able to get approved for a mortgage to purchase a home with this scenario? I live in Arizona where homes have lower mortgage payments than rent. Don't want to run my credit to try if I know it's definitely not possible.

9 Answers

  • 9 years ago
    Best Answer

    I don't know why the other 2 answered the way they did, but a credit score of 650 will qualify you for a mortgage. It is the other issues that you need to look at.

    I have just finished this exact process myself and live in New Mexico. My credit score is a 653, and I make $56,000 per year. I was paying $1,200 a month in rent plus $82 a month in renters insurance.

    I was able to purchase a $240,000 home with mortgage payments that include principal, interest, insurance and taxes with payments of $1,323.

    I also paid NO money down or closing costs with the assistance of a temporary 2nd mortgage for $8,000....which covered down payment and all closing costs. The monthly payment for this is $113.

    All said and done, I am spending $148 a month more than I was while paying rent, and will at least have something to show for it.

    I used an FHA loan which has a credit score requirement of 620.

    What you may need to look at is your income to debt ratio. The mortgage company will use your gross monthly income and all revolving accounts monthly payments, installment accounts monthly payments and your expected mortgage payments and need to come up with a debt ratio of less than 53%.

    Hope this helps more than those people just saying yes or no, without any understanding of the programs out there.

  • ?
    Lv 4
    3 years ago

    650 Credit Score Mortgage

  • E&L
    Lv 7
    9 years ago

    Your current credit score puts you in the 'poor' range, so you must do everything to bring it up. Having that working against you, right now if you DO get approved for a mortgage, realize that you will be paying nearly double in monthly payments for the same house as someone with 'excellent' credit. You MUST bring your credit card balances to no more than a third of the available limit to improve your score. If you have ones you don't use, cancel them now. The days of 100% financing are over, and the worse the credit, the more you will need to even be considered for a mortgage. Expect a lender to want 20% down. If you put less than that. your be hit with an additional 'insurance' your must pay monthly, PMI.

  • Rick B
    Lv 7
    9 years ago

    You are NOT in a position to buy a house. You are already spending more than you earn; how can you possibly add onto that?!?! No, mortgages are not going to be lower than rent. You will have to pay principal, interest, insurance, and taxes each month. It is VERY unlikely you will be able to pay less than rent - unless you are renting a very nice place and plan to buy something of lesser quality.

    Then, you have the higher utilities, maintenance, lawn care, etc.

    You need to pay off and stop using your credit cards, save up 10% to 20% for a down payment, save another 3% to 5% for closing costs, AND have a cash emergency savings fund of 3 to 6 month's expenses.

    Then you can start thinking about a house.

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  • Diane
    Lv 4
    4 years ago

    No, it's not that good. Most lenders seem to be looking for people with a credit score of *at least* 700. A credit score of 650 will probably get you a high interest rate.

  • rtfm
    Lv 7
    9 years ago

    Wow. Not very likely, not with no down payment and two credit cards already maxed out.

    Pay off the cards, save up a 20 percent down payment, and THEN you can think about buying.

  • 9 years ago

    hey ,

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    Just Enter the link and sign up .

    Hope that was helpful for you

  • Anonymous
    3 years ago

    whenever I ask a question, even if it's the easiest one, they can't provide me a good informed answer here. what happened to people who really make the effort to write an answer??

  • 3 years ago

    More details needed

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