Buyer with poor credit, no money down closes on home

Mortgage lender: James Forte

Property type: Single-family in Meriden

Purchase price: $140,000

Borrowing amount: $140,000

Loan type: 30-year fixed FHA

Rate: 5.125 percent

Background: The borrower was a store manager at a local retail store. The borrower had a credit score of 560 coming in the door and no down payment saved, but she knew she could afford to buy and comfortably pay for the mortgage payment.

The borrower never dreamed she could actually buy a home because she had virtually no down payment and poor credit but saw hope when reading about one of Forte’s success stories helping someone else in a similar situation.

Borrowers called Forte with very low expectations and nervous about the process. Forte took the full application and was able to do a credit rescore for the borrower, which brought her credit score up from a 560 to a 640 in less than 2 weeks.

The rescore comprised of Forte advising the client to pay down certain credit cards, shift balances from certain cards to others and removing authorized user accounts. This did not cost the client any money and with the 640 score Forte was able to approve a program to purchase with the Federal Housing Administration and no down payment.

Forte’s company Finance of America is one of the only lenders in the country with this special 0 percent down program. Most lenders require at least 3.5 percent down.

Forte was also able to get all the closing costs financed into the loan so it was literally only $100 out of the borrowers pocket to buy a house.

Forte explained that not only will they save money per month as the total payment with taxes and insurance included was less money than comparable homes for rent, but in addition, it cost less money out of pocket to buy as a rental is typically first month, last month and one or two months as a security deposit.

The client was able to achieve what he thought was not possible. The moral here is that a very large percentage of people who rent can actually buy for less.