Apr 6, 2018

How tough is it to get approved for a mortgage? How low can your FICO credit score go before your lender shows you the door? And how much monthly debt can you be shouldering — credit cards, student loans, auto payments — but still walk away with the home loan you're seeking? You might be surprised. New data from technology giant Ellie Mae, whose loan application and management software is widely used in the residential finance field, reveals that even if you've got what seems to be a deal-killing low FICO score or you're carrying a high amount of debt, you still might have a shot at qualifying for a home loan to buy the house you want.

So how do buyers with sub-par FICOs, skimpy down payments and high qualification ratios manage to get a home loan? The key is this: They don't have these negative factors rolled into their applications all at once. If they did, they'd probably be rejected. If they've got a weak FICO, they need strong "compensating factors" elsewhere in their application to counterbalance the credit score deficiency. Maybe it's a larger down payment than is typical, lower than average qualification ratios or higher bank reserves. FHA guidelines, for example, allow Woodside to offer FHA loans with sub-580 credit scores down to a bare minimum credit score of 500. These borrowers, however, need to put 10% down on a home purchase versus the 3.5% requirement if a credit score is above 580.

Regardless of the buyer’s scenario, Woodside has access to almost all of the latest and most lenient loan programs and guidelines that help allow challenged homebuyers to enter the housing market. Call your Woodside Loan Officer today to discuss our unique product offerings.