What type of home loan is best for someone with 680 Credit score, no money down?

Posted on Oct 27, 2012 in FHA Information

Question by BiDeLiEv: What is the predicted trend for mortgage rates in the next 5-10 years?
Any experts out there? I just had a mortgage broker at Chase tell me that they are expecting them to go to “Carter-Administration” levels: 10-12%! Was he just trying to scare me into refinancing with him? Could it really get that bad???

Best answer:

Answer by pagodaboy2001
Yep he is trying to scare you. No one can tell you the future interest rates. There are no experts unless they can see the future.

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best home loan
by eyewashdesign: A. Golden

Question by The Skizzanator: What type of home loan is best for someone with 680 Credit score, rx no money down?
I’m looking to buy a home. My credit score is 680, clinic but I have no money to put down. What is the best loan option for me? A friend is buying a home and he says his rate is 1% and his mortgage increases by 1% per year. Not his interest rate, but his mortgage payment. That doesn’t sound right to me. Any advice?

Best answer:

Answer by capnemo
I don’t know where you could get a 1% mortgage, but that’s very good if you can. Go and talk to a bank or mortgage company. There are many options and no one on here could give you a full range of options without knowing much more than you can give here. It’s best if you have a down payment though. Happy home shopping!

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5avg.rating 24 votes.


  1. If you are buying outside a big city try getting a rural development loan.

  2. your friend does not understan his mortgage and the negative am. You can do an 80-20, best to call me though so I can talk to you in person. Free advice, Jim 313-304-4645

  3. a 680 credit score will qualify you for 100% financing with most companies. Check with your local bank or a mortgage broker. Most likely they will give you and “80/20” which means you’ll have 2 loans, one at 80% of the purchase price, the other at 20% of the purchase price. Most often, the seller will concede a portion of the sales price towards closing costs to help with “no money down.” However, you still need to come up with an earnest money deposit of $ 500-$ 1000 once a purchase agreement is reached.

    You friend’s loan is a “Pay Option ARM.” The payment rate is 1%, though the interest rate is higher. That particular loan is not offered at 100%. You’d have to have at least 5% down to qualify for that loan.

    Good Luck!

  4. There are several options for someone with a 680, but the vanilla 30 year fixed rate mortgage is often the best. A steady payment with no change.

    What your friend has is called a pay option ARM. It’s an adjustable rate mortgage that allow you the option to pay the entire payment, interest only, or below interest only. Paying below the interest will cause the principal of the loan to increase, which you will pay interest on. So while he’s paying less for now, unless he knows what he’s doing, he’s going to end up with a loan larger than the value of the home and more costly than he can afford. These loans are not for conventional homeowners. They are meant for investors or people planning on selling the home soon.

    There are the 80/20’s that some of these people have been speaking about, but the 20’s are Home equity loans, which I try to steer my clients away from. I can get you 100% financing without an 80/20 or a 90/10, but with PMI that is now tax deductible and will fall off in a short amount of time.

    If you want to discuss mortgage options, send me an email, or check out our website and fill out an application.



  5. The big question is how much do you make and how much do you owe. The mortgage you talk of is non-sense.

  6. I just bought a house. My middle credit score (the one mortgage companies use) was slightly higher than 680, and I got 100 percent financing (no money down) from a local bank at a decent interest rate.

    2 things to consider:

    You have to pay private mortgage insurance, so your monthly payments will be a little higher than if you put the money down, and you won’t have any equity in your house in case you want to take out a home improvement loan.

  7. Most likely he has a Rural Development Loan and/or grant. First time home buyer program. Find a Buyer Agent and have them get you started.

  8. Either he doesn’t understand his mortgage (how long has he been in it?) or he’s on something REALLY WEIRD. There are programs for buyers which start out at a low interest rate and then it goes up until it reaches the ‘norm’, usually over 5 years. But tehre can be penalties involved if you sell before then.

    Your credit is fairly strong. Just go to a bank and get prequalified and see what rate you get and what you qualify for…and then go from there. …..