What problems could arise in looking for a 550K loan for two people with credit scores of 570 and 630 with a total income at 150K a year?

Answer 1

The lender is going to use the lowest of the two middle scores--in other words--if out of the 3 scores from the "3 credit reporting agencies" per each of you, 570 and 630 are your middle scores--570 will be the one used. By using the 570 score, a subprime loan will be done which mean you will have a higher rate to deal with and possibly higher PMI payments if you don't have 20% down or qualify for an 80/10/10. ( 10% down payment, 10% 2nd mortgage and a 80% 1st mortgage). If it were me working on this loan, I would see if the person with the 630 score could do the loan by him/her self. If the loan can be done with only the one person on the loan, the rate will definitely be better. The other person could or would be on the deed depending on the state. If this is not possible, can you do anything to clean up the credit fast. Without paying off any collections now, are there any collections that are still showing balances that were paid before--at an earlier date, are there past due payments made on loans or charge cards that were not paid late and you can prove it by cancelled checks or your bankstatement, is the same past due loan, charge card or collection showing up 2 or 3 times instead of once, or are there accounts showing that are simply not yours........ If so you can fix this, find a broker that may does business with a third-party reporting agency that has the service that allows you to correct inaccurate consumer credit report information reported by the three repositories; or that uses a third-party company for pulling credit and order a complete update on your report. (the 1st one is offered as a free service to their customers, the 2nd one will cost about $45-$75 depending on where you are). You want to correct any old information with old information (ex: you paid a collection last yr but is still showing unpaid- you want it to show pd but with last year's date not todays) any new dates added to the report such as present dates will not help you better your scores. It will make the scores worse for atleast 30 days, before they slowly start to get better as the months go by.