Low Credit Score Mortgage

30 Year Fixed Rate : 6.75%
0 Points * APR:

15 Year Fixed Rate : 6.25%
0 Points * APR:

FHA 30 Yr Fx Rate : 6.325%
0 Points * APR:

*APRS based on $300k loan amount

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Low Credit Score Mortgage

So do you have a low credit score? Well, what's a low credit score you may ask? Well, if you dont have a 620 or higher credit score, you will not pass through the desktop underwriter (du) and you won't qualify for the best rates. (automated underwriting). You must have a 620 mid score for Fannie Mae otherwise lenders cannot sell your loan in the secondary market. This isn't the end of the world, it just means you won't qualify for an Fannie Mae or Freddie Mac type of loan.

So what are your options if you don't qualify for a traditional mortgage? If you can't get a du approval with a 620 score, you can get an FHA loan if FHA loans offer enough money for the county in which you are located. If your score is between 500 and 620 you can obtain an FHA loan. You will have to pay the necessary upfront and annual mortgage insurance premiums. On a refinance, this monthly mip is .85% of the mortgage amount/12. There are very few lenders that go to a 500 credit score on FHA but we do have access to the ones that do here at PWC.

The other option on a low credit score mortgage is a subprime alternative lender. PWC has a number of these niche lenders available. So if you don't want the mortgage insurance on an FHA loan, you can take a loan with a higher interest rate. These are often referred to as band aid loans because they are typically not a long term solution. If you refinance your loan with one of these, you will pay off your existing mortgage which should help to raise your scores. If you are paying off anything else, that can also help and this is strongly advised. Then, in 6 months, you can refinance into a better type of loan. (Fannie/Freddie). For some however, this is a problem. A low credit score is not the only reason to take one of these loans, but another major reason is income documentaton. If your tax returns don't measure up and your debt to income ratio is over 50% DTI, you can take one of these alternative doc type loans which permit bank statements for qualifying. The rates are higher on these since they are riskier loans when you're not able to qualify with your tax returns.

If you are self employed, even with a low credit score mortgage, you can use 12-24 months of bank statements to document your income. You must be self-employed to use bank statements for income documentation. Or, you must have some type of side business if you are salaried receiving a W2. For more information on what is available for your specific situation, please call us today at 949-922-4200.