Mortgage with bad credit score but 60-70% down payment?

I am currently working on rebuilding my credit, it's at about 550.

The house I currently own I bought foreclosed for $60,000 paid in full, I plan on selling it for around $110,000. Therefore, I will have about $100,000 as a down payment. I'm looking at houses around the $150,000-$170,000 range. Is it possible for me to get a mortgage with such a bad credit score?

What can I expect for rates? What are my options?

I've heard of private money lenders, what kind of rates can I expect from them?


...I am working on rebuilding my credit. I have one credit card balance, and I'm making monthly payments to pay it off.

I understand my credit score is poor, which is why I'm asking if there are any options with a

high down payment.

6 Answers

  • 7 years ago
    Favorite Answer

    No, not a mortgage. A private lender *maybe*, but you are such high risk they are unlikely to bother with such a small payout. If you get one expect to pay 12% interest with a 5 year term.

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  • 7 years ago

    FHA loans require a minimum credit score of 500 for a loan with a LTV of under 90% and 580 for a loan with a downpayment under 10%. However, mortgage lenders generally require a minimum credit score of 620.

    One important point you did not address is your DTI (debt to income ratio) and your overall financial situation. Mortgage lenders do use compensating factors. If for example you have a large investment portfolio, or a large stable income with no debt and your DTI is low, then you might find a mortgage lender who will offer a loan. You will have more chance of finding a local bank or credit union that holds on to the loan on their own portfolio (and don't sell the loan to Fannie Mae, Freddie Mac).

    You asked about hard money lenders. The sub-prime market pretty much dried up after the 2007-2008 crash. If you do find private money lenders, then you will be looking at high interest rate, high cost loans. Those loans usually have terms that make the loans very risky, including balloon payments. In general, I would advise against these types of loans.

    Your next step: Prepare your finances, check out your DTI level and then shop around with a local lender to get a feel for the market.

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  • 7 years ago

    Sorry, but any mortgage company must see all items in collections showing

    PAID/$0. No way around this.

    Is there a reason you are not paying old debt?

    Ask here how to negotiate settlements before the sue the heck out of you.


    Pay the credit card in full today.

    Carrying balances is a fast way to destroy credit.

    Never, ever carry balances again.

    Use a card for things you need like food or gas, and pay in full when you get the bill.

    And, there is more than just a maxed out credit card.

    All this needs to be attended to.

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  • 7 years ago

    We just got a loan in march and when I called around asking about scores everyone stated 620 or better.

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  • Anonymous
    7 years ago

    Depends on the loan compan. BUT DEFINITELY DO NOT, NOT go to a private money lender. Bad idea. You would regret that.

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  • Ryan M
    Lv 7
    7 years ago

    Why don't you just apply and get REAL answers from REAL lenders and not a bunch of Yahoo's who have no REAL idea? Is hearing the word "No" really that frightening and intimidating?

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