CREDIT RANKINGS & LOAN TO VALUES
Since 2008 in this Great Recession many homeowners and major segments of population have been hit hard with bad credit and the resulting derogatory information is just the norm rather than an exception. The economic crisis has taken a toll and challenged many borrowers from every walk of life. If you have experienced any of these difficulties, in these difficult times its something very common. We have enough resources here to help.
Tell us about your situation and we’ll help find a loan. On this page is a general layout for credit criteria used for bad credit home loans and mortgages in a table format. A minimum 500 credit score is needed for all types of loans. Given below is a table outlining various types of credit criteria s that lenders use. In fact that is what we have used since 2008 to the present. The are no hard and fast rules, it varies among lenders and should be regarded as a general guideline.
|620 +||90% loan to value||90% financing|
|580-600||80-85% loan to value||20-15% down payment|
|550-580||70-80% loan to value||30-20% down payment|
|535-550||60-70% loan to value||40-30% down payment|
|535||60% loan to value||40% down payment|
A CREDIT 620 + FICO SCORES: Very few or no credit problems within last two years and no mortgage late payments, 90% financing possible with documented income.
A- MINUS CREDIT 580–600 FICO SCORES: Very few or no credit problems within the last two years. No major credit issues like bankruptcy or foreclosures. One or two 30-day late payments.
B CREDIT 580–600 FICO SCORES: Since 2008 this is where most credit reports fall. You will need 20-15% down payment if you are purchasing a home or creative methods to overcome down payment needs and lender requirements.
C CREDIT 550–580 FICO SCORES: Lots of late payments in the 30- to 60-day range in the past few years. Any late mortgage payments that are in the 60- or 90-day range. A bankruptcy or foreclosure that had been discharged or settled in the last 12 months. You will need 30-40% down payment on purchases or seller financing in your loan.
D CREDIT 535 FICO SCORES: Open collections, charge-offs, notice of defaults etc. Multiple 30-, 60-, 90-day or longer missed payments. Typically a 40% down payment or some seller financing on purchases needed. This where foreclosure has been recorded recently.
These requirements change, but gives you an estimate what to expect when looking for bad credit mortgages. If you are refinancing with bad credit you will also have loan to value requirements. Credit scores are derivative of your current financial situation and it changes with time and can be improved with some efforts as you can read on this site.