PMI felt like a punch in the gut every month. But honestly, the appreciation on that property more than made up for it.
Here’s how I’d approach it with a 580 score:
1. Look at FHA loans—they’ll take 580, but you’ll need at least 3.5% down.
2. Get your docs in order (income, debts, etc.), lenders will want to see everything.
3. Expect PMI, like you said—it’s unavoidable at that score, but if the numbers work, it’s just a cost of entry.
4. Run the math on rent vs. mortgage + PMI + taxes/insurance. If it still cash flows or you’re in for appreciation, it can be worth it.
I’ve done deals where PMI stung, but over time, rents and values climbed and it faded into the background. Not ideal, but sometimes you just have to get your foot in the door.
3. Expect PMI, like you said—it’s unavoidable at that score, but if the numbers work, it’s just a cost of entry.
PMI was a killer for me too, but I get what you mean about it fading into the background once you see your equity grow. I refinanced out of FHA after a couple years—once my score improved and the value went up, I dumped PMI altogether. It was a hassle, but worth it.
One thing I’d add: double-check those closing costs and make sure you’re factoring in future refi potential. With a 580, you might be stuck with higher rates and PMI for a bit, but if you plan ahead, you can escape it sooner than you think.
Honestly, I wouldn’t bank too hard on being able to refi quickly, especially with rates bouncing around like they are now. Sometimes folks get stuck with PMI longer than they expect if the market cools or appraisals come in low. Not saying it’s impossible, just… don’t count those chickens before they hatch.
I hear you on the refi thing—timing’s a gamble, especially now. But I do wonder if folks are maybe too quick to write off the benefits of getting in sooner, even with PMI. Sometimes waiting for the “perfect” rate or credit score just means watching prices climb out of reach. Ever had a client who waited and then regretted it? I’ve seen that more than once... Not saying jump in blind, but sometimes the math works out differently than expected.
Can You Buy a Home with a 580 Credit Score?
Man, I’ve watched more people “wait for the perfect moment” than I care to admit. Spoiler: that moment rarely shows up wearing a neon sign. I get it—PMI isn’t anyone’s favorite monthly guest, but sometimes it’s the price of admission. Had a buddy who waited for his score to hit 700... meanwhile, prices in our area shot up like they were on Red Bull. He’s still renting and grumbling about it. Sometimes you just gotta run the numbers and accept that “good enough” beats “never got in.”
