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FHA purchase what are the reserves on 580 credit score?

by tim.baud823 from Fort Shafter, Kansas. Aug 21st 2017 Reply


Sara Deere (Saraloveshomeloans)
#1 ranked lender in Kansas - 511 contributions

It depends on more than just your credit score for the amount of reserves. I have seen zero to 6 months required. The best way for me to let you know is by us having a conversation and looking at other supporting documents. I can be reached at 816-739-6279, saradeere@leader1.com, or www.saradeere.leader1.com.

Aug 21st 2017
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,553 contributions

Generally speaking, the lower your score, the more difficult it is to get any financing, and a 580 score is considered very low. Lenders always need to run the application through the official underwriting computer to give you an exact answer. FHA is usually zero, but I have seen many a file be denied with that low score, but yet some be approved with a either few months of reserves, and/or moving the down payment from the 3.50% minimum to 5%. For FHA loans in MN, WI, and SD, visit me at www.MortgagesUnlimited.biz

Aug 22nd 2017
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Hi Tim, that is a great question. Typically here at Flagstar Bank our guidelines do not require additional reserves when we receive an approve through our automated system. When your total debt ratio is over 50% of your income we woukd then require a two month reserve. But it is dependent on your overall picture for credit and job history. If I can help with anything or answer any questions please feel free to call or email. Jason mickschl 913-549-8595

Aug 22nd 2017
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 8,000 contributions

More info needed, but the short answer is that once you apply, your file is run through an automated underwriting system.. The results will typically dictate how much, if any, reserves would be required.. But I've never seen FHA ask for more than 6.. typically, it's 0 to 2.. The best advice I can give you is to contact a mortgage banker/broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with a Banker/Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the banker/broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the big box banks. I'm a preferred Lender with California and Arizona being my primary markets. 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 NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Aug 22nd 2017
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