I’ve actually seen a couple folks squeak by with scores in the 620s, but it’s usually with higher rates and more hoops to jump through. Lenders are definitely picky right now. Have you tried any portfolio lenders? Sometimes they’re a bit more flexible, especially if you’ve got solid reserves.
I’ve noticed the same thing—once you dip below 640, it’s like lenders start pulling out their magnifying glasses. Here’s how I usually approach it when credit’s not ideal:
1. First, I check if the property itself has strong cash flow. Some lenders are more willing to work with less-than-perfect credit if the rental income covers the mortgage by a good margin.
2. Next, I gather up all my documentation—tax returns, bank statements, proof of reserves. The more you can show you’re stable, the better.
3. Then, I’ll look at smaller local banks or credit unions. They sometimes keep loans in-house (portfolio lending) and have a bit more wiggle room than big national outfits.
One thing I’m curious about: Has anyone tried going through a mortgage broker instead of directly to banks? Sometimes brokers have access to niche products that don’t show up in your typical online search. Just wondering if that’s helped anyone get over the credit hurdle lately...
I’ve noticed the same thing—once you dip below 640, it’s like lenders start pulling out their magnifying glasses. Here’s how I usually approach it when credit’s not ideal:1.
I’ve actually had better luck with brokers when my score dipped under 640. They seem to know which lenders are flexible and can sometimes find those “off-menu” products you mentioned. One broker found me a DSCR loan that a local bank wouldn’t touch, even though the property cash flowed well. It cost a bit more in fees, but it got the deal done. Worth considering if you’re hitting dead ends with banks directly.
Brokers can definitely open some doors, but I’ve had mixed results there, especially when my score dipped into the low 600s. Just to play devil’s advocate—sometimes those “off-menu” products end up costing way more in the long run, between origination fees and higher rates. Like you said:
It cost a bit more in fees, but it got the deal done.
Last year I tried that route for a small duplex and the broker’s lender wanted 3 points upfront. It technically worked, but after running the numbers, I realized I’d be underwater for almost two years just covering the extra costs. Ended up waiting and fixing my credit a bit more before pulling the trigger elsewhere.
If you’re in a time crunch, sure, brokers can help. But if you can afford to wait and clean up your score even 20-30 points, sometimes that opens up better options with less sticker shock down the road. It’s not a one-size-fits-all thing... depends on your timeline and risk tolerance.
Yeah, those upfront fees can be brutal—been there. I get why people go the broker route when they’re in a pinch, but man, the long-term math rarely works out unless you’re flipping or something. Did you find any lenders that were actually willing to negotiate on points, or is that pretty much set in stone when your score’s low?
