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60% LTV with 600 Credit Score

Am I eligible for any kind of home equity loan or refinance? I need to make repairs to my home. by egretl_468_103 from Madison, Wisconsin. Jun 8th 2012 Reply


William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,360 contributions

There are lenders out there that will lend down to 600. A good lender will help you improve your score and do it quickly. But don't be confused.. there is more to getting approved then a credit score... if you have any tax liens, judgments, mortgage delinquents, debt to income problems, etc.. all can prohibit your ability to get approved... The best advice I can give you is to contact a LOCAL mortgage broker, not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

Jun 8th 2012
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Brett Pehrson (brettpehrson)
#19 ranked lender in Utah - 226 contributions

A lot depends on your repairs, but a 600 score would be tough for a home equity loan. You'll likely find yourself doing a full refinance and trying to get cash-out. With your score an FHA loan would be the most likely choice, assuming those repairs aren't serious deferred maintenance issues, like was already suggested in another comment. You may find it best to look at an FHA 203k loan, unfortunately, most that you'll find who do these don't go below a 640. I'd suggest talking to a local mortgage broker about this; I'm not local, but I know of one lender in my area that I can broker through that will do this kind of loan down to 580, so it can be done, just don't expect it to be easy. Best of luck to you!

Jun 8th 2012
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Joshua Wachowiak (Joshua.wachowiak)
#23 ranked lender in Wisconsin - 68 contributions

In order to do a cash out refinance, you would need a 620 score, so your current score is close. You could then in all likelihood lower your current interest rate AND get money. A cash out refinance on a FHA loan can be done up to 85% of the value of the home. This would be the way to go. Today a 30 year fixed FHA loan is approx 3.50% and since rates are the lowest ever, I would guess that this would improve on your current rate. You would then get the money back at closing and you could make the necessary repairs. The important thing to note, would be that the home loan is capable to close prior to the repairs being done. It depends on the type of necessary repairs as to whether you will be able to do a FHA cash out refinance prior. An appraisal would be necessary and so if the needed repairs are for items that keep the loan from closing (roof, structural problems, etc) you wouldn't then be able to get the money until you fixed those. So if this is the case and the repairs could keep the appraisal from being accepted, then the only way to do it would be to get a Conventional loan. A cash out refinance for a conventional loan can go up to 80% of the value. You would typically need a 640 credit score or somewhere close to that in order for the automated underwriting to work Equity loans typically have a higher credit score requirement (680) and so this is not a likely option. I hope this helps. If you have any questions, just give me a call anytime at 920-277-3595. My name is Joshua Wachowiak and I am the branch manager for Freedom Mortgage in Appleton, WI and I would be happy to help you.

Jun 8th 2012
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MIKE CONVIN (mconvin)
#5 ranked lender in Delaware - 202 contributions

hi there: You are welcome to give me a call to discuss...One of our investors will go down to a 600 fico score with that LTV...but would need to ask you couple more questions regarding your credit, income etc overall picture if that's fair....Mike Convin NMLS 754875--Emery FCU lending nationwide.....(703 505 5300)

Jun 8th 2012
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Larry Gray (lgray_312_247)
#585 ranked lender in California - 1,137 contributions

Work with a loan broker or lender representative who can demonstrate they have experience in aiding peoplewith increasing their credit scores. They will often do loans that alot of people will not (i.e. 500 fico to 639 fico)and thus have had to help people get their credit scores increased. They can determine the least costway and fastest way for you to get to that 620 mid fico credit score you need!Generally they can demonstrate they utilize the credit rescore tool that can give you specific knowledge ofhow many points you might get when you take certain specific actions. Good luck!

Jun 8th 2012
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