Helena Talbot's blog - Buying A home With A 620 FICO Score

If you're thinking about buying a home, you may have been discouraged by reports that mortgage lenders are now requiring high credit scores and large down payments. Lenders have undoubtedly tightened their standards, with many only approving mortgages to homebuyers with 720+ credit scores.

This doesn’t mean mortgage loans aren’t available for those with FICO scores in the 600s. There are FHA loans available that have lenient credit requirements. Additionally, there are state-sponsored programs that provide down payment and closing cost assistance, and the requirements are relaxed.

Every state has a Housing and Finance Authority with mortgage programs that provide assistance. It does vary state-to-state; however, lenders are familiar with different programs. While lending is almost always aimed at first-time home buyers, there are a small percentage of programs that don’t have that first-time homebuyer requirement.

Additionally, teachers, law enforcement and corrections officers, firefighters, nurses, emergency medical personnel and military veterans are offered a lower mortgage interest rate, down payment and closing cost assistance.

Are there judgment calls when it comes to a low FICO Score?

In short, yes there can be judgment calls made by the underwriter. Here’s why – there five factors that make up your FICO score.

1.Payment history takes into account whether or not you are paying your bills on time and for how long. This accounts for about 35 percent of your score.

2.Amounts owed are determined by adding up your outstanding balances and dividing by the credit available to you. You should owe less than 50 percent of the credit available to you.

3.Your length of credit history displays how long you have held your credit accounts. Lenders want to see that you pay off your debt over time.

4.New credit will account for 10 percent of your score. Never open new credit accounts when you’re about to apply for a new loan. This can adversely hurt your chances by decreasing your credit score.

5.The type of credit you use is also a determining factor.

While the lenders’ software determines if you meet the standard guidelines, the underwriter determines if you are a safe bet – will you pay back the loan without any fear of default.

So which factors are the credit killers?

High balances and late payments kill your chances at a mortgage loan. High balances drive up your debt to credit ratio and even those with the best FICO scores cannot get approved with a lot of debt. Late payments translate into an irresponsible adult. Lenders want to know they will receive their money on time, every month, without delay.

The biggest misconception about our economic downfall is that lenders are not approving mortgage loans. Discuss your options with a mortgage broker and a realtor to see what opportunities are available.

I specialize in helping buyers and sellers invest in real estate in Loudoun County and Northern Virginia. 

I have over 25 years experience in the real estate industry.  As a Broker/Owner with Exit Realty Talbot and Company, I bring special tools and solutions that enable me to exceed the expectations of my clientele.  If you are considering listing your property in Loudoun County or the nearby areas, ask me about our latest internet marketing systems.  I would appreciate the opportunity to earn your business.  I am experienced in listing and selling short sales.  For information on the short sale process, please visit  www.LoudounShortSaleSolutions.com.

My past awards and designations include – 2003 President of the Dulles Association of Realtors, 2003 Dulles Area Assoc Realtor of the Year, Salesperson of the year 2000 Dulles Area Assoc of Realtors,  Top Producer awards from both the Dulles Area Association and the Northern Virginia Association of Realtors.  I am a member of the Top 5 in Real Estate Network.

I have lived in Loudoun County since 1979.  I am married with two grown children and two grandchildren.  My son in law is my business partner in real estate.  I love to jog in the mornings and spend time relaxing on my Trawler during the summer months.

Loudoun County and Northern Virginia Real Estate Sales and Solutions – Helena Talbot, Broker. I specialize in helping buyers and sellers invest in real estate in the Northern Virginia area to include Loudoun County and surrounding areas including Fairfax, Clarke, Fauquier, Prince William  Counties.  Our local neighborhoods include Leesburg, Ashburn, Sterling, Potomac Falls, Brambleton, Broadlands, Lansdowne, River Creek, Belmont Country Club, Beacon Hill, Shenstone, Waterford, Lovettsville, Purcellville, Hamilton, Round Hill and Bluemont.                        Cell 703.727.9885    Office 703.574.3800   www.facebook.com/LoudounCountyConnect  www.twitter.com/ExitAshburn  www.Linkedin.com/in/HelenaTalbot