This is Ligonier's friendly neighborhood blog and an attempt to recapture our lively opinionated debates in a free speech zone.

Please join our conversations. Contributors welcome.

Wednesday, September 3, 2014

low FICO score - tips for getting a mortgage

So what can those with a FICO that is under 620 do to get a mortgage?
1. Prepare to pay more
People with poor credit can still get a mortgage, but they will pay far more than even those with credit scores on the margin.
Guidelines from the U.S. Department of Housing and Urban Development and the GSEs, Fannie Maeand Freddie Mac, advise waiting at least two years after a short sale, so long as credit after the short sale is good.
Sellers should be advised to do their homework on the mortgage brokers they are working with – shady and dodgy operators are like bottom feeders, looking to prey on those who are more desperate and who aren’t financially savvy, which is how they see people with poor credit.