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former Marine with low credit score but 25,000 down payment

Hello. I hope someone on the site will be able to help me. I am a former Marine who resides in East Texas. My wife and I have a down payment of $25,000 for a home. We have been told that although our credit is not bad, we do not have enough credit for a home loan. I have a 570 credit score, my wife a 620. I have worked for the same company for 5 yrs. We have paid off two cars in that time and have had no trouble maintaining our bills. I bring home $1,500 every two weeks. We are not looking for a fancy, grand home....no more than $95,000. For the last 6 months we have been trying to raise are credit score using a fuel card, but it has yet increase our credit score even though we have been early with our payments. I have two questions. First, is there anyway we can qualify for a home loan of any kind? Second, if not, what would be a more productive way to improve our credit score? We would really love to be in our first home by Christmas. Thank you for your time, any info would be helpful! by John_F_463_900 from Sulphur Springs, Texas. Mar 5th 2012 Reply


Henry J Daniels, CMPSI, CMHS (HenryJDanielsNationalMortgage)
#13 ranked lender in Texas - 133 contributions

Hi John, First of all Thank you for your service. Regarding your questions: When underwriting a home loan lenders underwrite on the person with the lowest middle FICO score. In your case your best option would be a VA loan. The most lenders doing VA loans will allow you to do a VA Home loan down to a 620 FICO. In your case you'd need to get your credit score up to at least 620 and preferably 640 for both you and your wife. 640 and above will get you lower rates and less hassles during the underwriting process. You mention that you are using a fuel card to raise your scores. To really raise your scores you need to have 2 to 3 open credit accounts with at least 1-year of history behind them. Do you currently have more than the Gas card? If not you will want to open another account such as a secured credit card immediately so you can begin building that year history I'd be delighted to discuss the details of your situation and provide additional guidance. Feel Free to call our office at your first opportunity Sincerely,Henry J Daniels - Sr. Mortgage Banker & CMPSI Certified Mortgage Coach"Educating you to make the right financial choices for your family today and tomorrow" Direct/Text: (936) 228-1944 & Fax: (832) 217-3033See our reviews and Testamonials on Active Rain

Mar 5th 2012
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Peter Torneanu (peter@loandoctors.us)
#80 ranked lender in Arizona - 10 contributions

John, You dont need to wait until Christmas to qualify. The longest it should take to fix your credit is 3 months. There are many ways you can get your score up. About 70% of my business revolves around people with very low Fico scores. We are called "The LoanDcotors" due to the fact that we know how to gets scores up very quickly". The score that you will need for VA is 620. As long as you have the income, I can get you into a home in 3 months. We underwrite for VA directly out of my office which means that we can make a lot of exceptions for people that do not have the best credit or have collections and chargeoffs. My name is Peter and you can call me at 480-289-7607 or go to my website www.LoanDoctors.usPeter Torneanu

Mar 5th 2012
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Bert Carpenter (BertCarpenter)
#38 ranked lender in Arizona - 1,823 contributions

John, First of all, thank you for your service. There are two possible issues here. One is that most lenders today require a minimum of three open and active trade lines at least one year old. The other is a low credit score. Your score is not very far from where it needs to be and getting your score up to an acceptable level should not be that difficult. If you have been told that you don't have enough credit, then it will be a little harder issue to overcome. I strongly recommend that you work with someone local to you, preferably a Mortgage Banker or Broker. You should be able to find one using Lender411, or try a search with Google, Yahoo or Ask.com. Avoid the big banks, and national lenders. You want someone who is going to take the time to get you where you need to be. Typically the employees of the big banks or National lenders are more likely order takers than consultants. Once you have selected a Loan Originator, check them out at the National Mortgage Licensing System at www.NMLSConsumerAccess.org. This is the database ALL mortgage originators must register through. You can check out their employment history and how long they have been a licensed originator. You will want to work with someone who knows what they are doing and has been doing it for a while, and not tending bar or selling cars just a few years ago. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

Mar 5th 2012
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I just wanted to say Thank You for all the responses! My wife and I have read over your comments and will open more accounts. You were all very helpful and we are very grateful so many of you took the time to answer our questions!

Mar 6th 2012
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Conan Henry (conan.henry12)
#106 ranked lender in Texas - 10 contributions

John:You do not need to not worry about down payment because you are a former Marine, you can do a VA loan with no down payment required. A VA loan is the best deal of any loan type if you're putting down less than 20% because there is no monthly mortgage insurance required.Your issue is your credit score. You needs a 640 to go VA or a 620 to go FHA or conventional. It looks like you doesn't have a lot of open trade lines and that would be a problem. If you don't have open good ones to offset derogatory items then you end up where you are. You needs to get two secured credit cards to go with that fuel card and keep paying your other bills on time. But it sounds like you only had the fuel card for 6 months. 3 open trade lines for at least a year are what a lender is going to want to see. I think you are a year away. Money available for down payment doesn't matter if your credit score doesn't work. Please Call if you have any questions my cell phone number is 936-499-6740. Thanks, Conan Henry

Mar 6th 2012
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