The End of NJ First Time Buyer Mortgages for Buyers Below 620 FICO Scores

By
Mortgage and Lending with Aurora Financial Group | Mortgage Company - New Jersey NMLS# 149277 & 149276

The End of NJ First Time Home Buyer Mortgages for Buyers Below 620 FICO Scores

by Steve Kappre, NJ Loan Officer

It was a nice run while it lasted, and over the last 6-12 months we were effectively able to put quite a few NJ first time home buyers into homes. As of March 15, 2010, NJ HMFA (Smart Start, Tax Prefund, and other options) will not allow a borrower to have a middle credit score below 620.

Credit Scores below 620Another tightening of guidelines will no longer allow buyers to use alternative credit and have no credit score. In the past, a lender could fund such a loan by placing 4 trade-lines that were not already on a credit report (i.e. cell phone bill, auto insurance, gym membership). Now if this is done and there still is no credit score, the loan can not be approved per NJ HMFA guidelines.

It is another blow in the world of mortgage financing.

There ARE some good buyers out there that have credit scores slightly below 620 that would make solid home owners. It is unfortunate that these guidelines restrict otherwise solid home owners. But the line has to be drawn somewhere. This makes the knowledge and understanding of credit scores and reports more important than ever!

With the end of NJ first time home buyer programs for buyers with credit scores below 620, it is more important than ever to work with a highly qualified, local mortgage loan officer. If your credit is marginal or below 620, call today for advice on how to raise your score to qualify for the Smart Start, Tax Prefund, or other HMFA program.

 

Credit Links

Credit Scoring - What Makes Up My Credit Score? (1 of 6)

Credit Scoring - Payment History (2 of 6)

Credit Scoring - Balances (3 of 6)

Credit Scoring - History (4 of 6)

Credit Scoring - Mix of Accounts (5 of 6)

Credit Scoring - Inquiries (6 of 6)

 

Steve Kappre is a mortgage loan officer in New Jersey. For more info or questions feel free to contact Steve.

  • NJ First Time Home Buyer
  • Purchase, refinance, rehab loans
  • Conventional, FHA, USDA, VA, HMFA, First Time Home Buyer, Police and Fire, Live Where You Work, and more

Call direct @ 856-419-3561 | Subscribe to Steve's blog via e-mail | NJ Loan Officer .com

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Treasury Mortgage - 550 Bridgeton Pike, Mantua, NJ 08051 - 1810 Springdale Road, Cherry Hill, NJ 08003

Licensed by the NJ Department of Banking and Insurance

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Topic:
Home Buying
Location:
New Jersey
Groups:
All About NJ Real Estate
Gloucester County, NJ
New Jersey Real Estate Experts
NJ First Time Home Buyer
South Jersey
Tags:
nj hmfa
smart start
tax prefund

Comments 3 New Comment

Show All Comments
Rainmaker
966,681
Edward & Celia Maddox
We Take The High Road
Solutions Real Estate

Thanks for updte.  We learn a lot from Active Rain blogs.  Best Regards,

March 13, 2010 09:17 AM
Rainmaker
908,080
Bill Gassett
Metrowest Massachusetts Real Estate
RE/MAX Executive Realty

Steve I know it is better for both our businesses in the short term when more people can get loans but in the long term there are plenty of people that have gotten loans with marginal scores that should not be home owners.

March 13, 2010 09:40 AM
Rainer
290,411
Richard & Carol DeGrace
Mortgage Loan Officers NJ 609-209-3700
Aurora Financial Group | Mortgage Company - New Jersey

Bill - There has to be a line. I agree. But I've had some pretty solid borrowers: LONG work history at current job, decent assets, etc. that just didn't understand credit scoring. I have buyers right now that got bumped out of this program that now need to work on their credit and may miss the tax credit. This works directly against the purpose of the credit - to get first time buyers to buy homes.

March 13, 2010 09:56 AM
Show All Comments
Rainer
290,411

Richard & Carol DeGrace

Mortgage Loan Officers NJ 609-209-3700
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