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Mortgage Question.....

Hi, this goes along with my recent statement. I am looking to aquire a loan of about $100,000. Due to recent changes in our life, our credit is not that great, around 590, but currently working on it. The house we are in now is huge, a $2,500 month loan. We want to downsize dramatically because it is only myself, my wife, and my 10 year old son. The house is looking towards a short sale. But even if it is a short sale, we will walk away free and clear. Is there any way we could get a small loan of only $100,000 under these circumstances? by keenajames from Louisville, Kentucky. May 18th 2011 Reply


Kevin Walton (kwalton)
#461 ranked lender in California - 5 contributions

Hello, it depends on the type of loan you are pursuing. A conventional loan will need a higher credit score, at least a 660 or 680 depending on the down payment you are using. An FHA loan is a bit more lenient on the credit score, 600 or so, but each lender doing FHA loans may put additional overlays (hurdles) on the program and require their own minimum FICO score. If you have a successful short sale, FHA states that you'll have to wait 3 years from the date of closed sale AND transferred to the new owner (buyer) before you can apply for a home loan. Conventional lending requires you to wait 7 yrs with less than 10% down payment, 4 years with 10% or more down, 2 yrs with 20% down, from the date of sale.

May 19th 2011
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