is an FHA better than a first time home buyers when it comes to credit score. our credit score is around 630?
April 12th, 2010 by admin
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6 Responses to “is an FHA better than a first time home buyers when it comes to credit score. our credit score is around 630?”
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FHA is better . . .I would not get a loan that you are not on if something were to happen to your husband then it would be bad for you . . .
My first-time home buyer loan was an FHA loan. First-time home buyer programs are usually for people with little money down and a credit score like yours. Without going through a first-time homebuyer program (if that’s what is happening), an FHA loan or a conventional loan would give you a much higher interest rate with that credit score.
First time buyer programs usually require less money down and are lower interest but require A+ credit ratings. In your case, FHA is the way to go because of your credit score and needing to use the dual income to qualify.
First, a borrower with a score 680 and above may be considered an A+ loan. The loan will involve basic underwriting, probably through a computerized automated underwriting system and be completed within minutes. Borrowers falling into this category will have a good chance to obtain a lower rate of interest and close their loan without any delays.
Second, a score below 680 but above 620 may indicate underwriters will take a closer look at the file in determining potential risks. Supplemental credit documentation and letters of explanation may be required before an underwriting decision is made. Loans within this scoring range may allow borrowers to obtain “A” pricing, but loan closing may still take several days or weeks.
Third, borrowers with a score below 620 may find themselves locked out of the best loan rates and terms offered. Mortgage professionals may divert these borrowers to alternate funding sources other than FNMA (Fannie Mae) and FHLMC (Freddie Mac). Borrowers may find the loan terms and conditions less attractive than the “A” loans, and it may take some time before a suitable funding source is located.
In the future, a high score may be your ticket to a speedy and competitively priced mortgage loan.
Go FHA and see if there is any state-grant money available. Ask your financial agency. Ask around. Shop for rates.
You might try to raise your number a bit. Ask the best way to do that, too.
In your circumstances, FHA is certainly better. Lender’s have tightened up considerably on guidelines and if your income is needed to qualify FHA may be your only viable option.
FHA was the original First Time Buyer’s loan program and it is still an excellent borrower advocated program.
You appear to be fortunate in your choice of loan officer, he/she is advising you wisely.
Not that the information you’ve gotten here is bad or anything, but the bottom line is the numbers. Whether it’s you and your husband on the loan, or just your husband, the title will have both of your names on it, so the responsibility will be equal and you’ll have to sign off on any move that is made in the future.
When I do a loan for my clients, I try to give them three options so they can see what’s available. I try not to concern them with telling them if it’s an FHA or ALT-A or First time home buyer.
I simply give them the loan that fits their needs. Ask your broker for a total cost analysis and you guys can decide. If he is unable to provide one, find a different broker.
I give this to all of my clients and close 92% of my clients once I prequalify them.
If you’d like a complimentary total costs analysis, you can contact me or visit my website caseycasperson.com