Does credit still play a big role when you....

[Hawaii_Corri]

Aloha,
My husband and I are considering renting our first home here in Hawaii, and buying another home in Texas country. Our credit scores are probably considered fair, but do they still play a big role in approval if you have a large chunk to put down on a second home? Or could there be a certain percentage one could put down for easy approval? Thank you for your help! :)

[TJ2007]

Although many lenders & programs now accept lower credit scores and even no credit scores, they are likely still the most weighted factor in getting a loan.

example - With the right credit now you don't even need to have ever had a job, income or any money in the bank and can still qualify for a 100% loan to purchase a home! - crazy

Not sure what you mean by 'fair' credit.
But generally the more money you put down the more relaxed the guidelines are and the interest rates will be better.
10, 20 & 25% downpayments are key markers.

Also in texas you have to watch the laws about refinancing to access your equity!! can limit you, so you may not want to put all your cash in now if possible.

[Nu-Home-Source-Realty]

The more you put down the less it matters. If you put 30% down you dont even have to have a job for alotof loans. We work with pweople with credit problem in Texas all the time

[OregonLO]

I'm a Loan Officer here in Oregon. How is Hawaii? I have some friends out there. They keep bugging me to come visit so I'm hoping to get away soon! haha.

But to answer your question. Yes, interest rates are credit score driven. The guidelines are certainly more relaxed if you have money down versus 100% financing. however if you have a 730 credit score plus 20% down you're going to get a fantastic interest rate. If you have a 630 credit score plus 20% down you will still get an attractive interest rate just not the best that is out there. What I would do is find out what is on your credit report and then figure out how to improve it from there.

You are welcome to email me and I can help you get your credit where you want it to be. I've gotten quite good at helping my clients improve their situation to get them more attractive interest rates.

[Hawaii_Corri]

40% is what we have to offer for the down. Our score is 620. Thanks for all the great info you guys!!

[OregonLO]

with 40% down you should be in a pretty good position. If you have a copy of your credit report I'd like to take a look at it and see where you might be able to improve your credit score to further help you secure a good payment.

[TJ2007]

Be very careful about having your credit pulled all around & watch out for those internet sites that offer credit reports -99% of them are worthless & too expensive.

Plus they tend to give you 'Fake O' scores not real FICO scores!:eek:

You may also damage your credit by having it pulled by several lenders

BEST ADVICE: Talk to a couple brokers first and when you are happy, let one broker pull your credit
OR
Go to MYFICO.com and get the real deal, you can let mortgage providers review this report for preliminary pre-qualification and then only let the one you decide to go with actually repull your credit.

[TJ2007]

Also I would advise against the 40% downpayment - especially for Texas.
You are going to lock up equity that you won't be able to touch in an emergency!!!

20-25% should be plenty to get you the best terms out there.

PS OregonLO sounds like you guys are pretty tough on those credit scores over there LOL

[Hawaii_Corri]

Very helpful information, thanks so much guys!! :)