There are many home loan programs available out there for people with credit scores, or fico scores, in the mid 500 range. The mid 500 range consists of credit scores from anywhere between 530 and 570. Some of the programs that are available for credit scores are listed throughout this page.

Quite often, your debt to income ratio can be improved which would greatly help if your score is in the mid 500's. If your DTI or Debt-to-Income ratio is off by a little a mortgage broker can sometimes get a 40 year amortization which can lower the payment enough in some cases to allow you to qualify under the lender guidelines. This can also be accomplished with an interest only payment. In either case this is a temporary way to make the loan work until you can get your scores to a point where you can obtain a better rate and lower payment.

There are mortgage alternatives available with mid 500 FICO credit scores. Contact a mortgage professional to determine which loan is best for your situation. A mortgage broker can also help you increase your credit score if you have a mid 500 FICO.

There are many loan programs for people with mid 500 scores that will allow you to purchase a home with as little as 10% down. Some programs will even allow 90% financing all the way down to a 500 credit score. Loan programs in this niche change frequently, but most will require a full documentation loan, that will require you to prove your income, employment, and assets.

There are mortgage options for those with mid 500 FICO scores, how wver they come with stricter guidlines and higher interest rates. Its important to start improving your score by paying your bills on time and keeping your credit card balances below 50% of your credit limits. Dont close out old credit card accounts since they help define your credit history.

FHA financing and Fannie Mae financing are attainable with mid 500 credit scores. There typically needs to be some sort of compensating factor(s) such as a strong equity position in the property, good assets reserves in the bank and/or 401k, or a very low debt-to-income ratio. Call Marty Searing at 414-303-1215 or msearing@mayfairmortgage.com to speak to an expert in automated loan scoring.

Even with a mid 500 credit score you may still qualify for FHA financing. FHA does not look at just score but rather your overall credit profile. If you have been paying bills on time and trying to better your financial situation ask your mortgage broker about an FHA mortgage loan.

Most of these mid 500 score programs are designed to be short term loans for borrowers. It allows them to get into a home, get cash out, consolidate debt while waiting for their credit scores to improve so that down the line they will be able to finance a better rate/term loan.

There are benchmark scores that are important when getting a loan. Some programs only become available at certain credit scores. If your score is in the low 500's then chances are an interest only payment is not an option. The same with 100% financing. Usually the benchmark for 100% financing is at 580. However some lenders are now requiring 600.

This is why working with a mortgage professional that uses the "rapid rescore" technique is so important. Sometimes just doing a little credit fixing can make or break your next loan.

 

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