How hard would it be for someone who has the following credit profile to get a mortgage (conventional, not jumbo):
– Had a mortgage 10 years ago (currently has no mortgage)
– FICO score ~700
– Has only 2 credit cards
– Has no debt
– %50 down payment[/quote]
Relatively easy as long as you qualify based on income.
You would not want FHA.
Do you qualify for a VA ?
For conventional there are 2 loan limits ($417K & $546K in San Diego County) and 5 down payment tiers for a purchase. (3% 5% 20% 25% and 40%)
There are pricing hits based on credit score bucket AND down payment. It’s a cut & dried matrix table, no exceptions, no excuses, no explanations.
They always use the middle credit score of the 3 bureaus, the highest & lowest are ignored.
If 2 people are needed to qualify, the use the lowest borrower’s middle score.
In many cases this presents a problem, but if a borrower’s income is not needed to qualify I suggest considering only 1 person on the loan, spouse can still be on title which is the ownership part.
Let’s say there are 50 conditions that have to be signed off before a loan is approved.
Nothing gets overlooked because of a higher credit score OR larger down payment.
All 50 conditions need to be signed off.
Having a larger down payment on a purchase (OR more equity on a refi) doesn’t make it any easier to qualify for a loan, other than the fact that your payment is lower.
They DO NOT say “there is 50% equity, we won’t lose money, let’s just fund the loan”
they are not looking to foreclose and there are many obstacles to doing so.
Credit scores generally need to be at least 620 but you will have a higher rate OR cash price to pay to get what someone with a 740+ score will get.
Most people don’t grasp that there is not one rate that fits everybody. In most cases a mid score above 740 gets you the best pricing. It doesn’t make it any easier if your score is 800 or 840.
feel free to contact me privately if you have specific questions.
Approvals don’t care about how much debt you have, they only look at minimum monthly payments on a credit report.
Many people are not aware that they can raise their credit scores relatively easily & quickly.
It seems like your score should be much higher than 700~ but it depends on your history.
Just because someone has 50% down, zero debt, an 800 credit score and $1 million dollars in the bank, it doesn’t mean that they can qualify for a conventional loan.
In many cases it’s easier for someone with 3% down, other debt, no cash other than down payment and a much lower credit score to qualify.
………It’s simply idiotic.
