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260k loan with credit scores

650 and 680 credit scores, is fha the only way to go for a 260k home with 18k for down payment, and first time home buyer.

  • August 12 2013 - US
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Answers (6)

You should avoid FHA at all costs, it's the new sub-prime loan!

You will quallify for a Conventional loan with 5% down. I would be happy to help you so please contact me.

GL

  • August 13 2013
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It is typical to have 3 scores.  If you really only have the 2 you mentioned then 650 would be scored used, and an FHA loan would be better option.  Rate on conventional will be .25% to .375% higher, and MI on conventional ( if even available) would be about the same for FHA. If your middle score was 680 or higher than conventional would be way to go. Might be good time to contact a local lender and discuss pre approval, including getting a copy of your credit report and resolve the 2 credit scores vs 3.

  • August 12 2013
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Ask your lender for an estimated cash to close worksheet for both an FHA with 3.5% down and a Conventional mortgage with 5% down. Your score qualifies for both-but the interest rate might be a touch higher going conventional. However-the benefit is that there is no funding fee vs FHA AND the MIP will drop off eventually (it's on for the life of the loan with FHA). Long term Conventional will likely be less expensive but if you're only in the home 5 years, FHA might be a better bet. Ask for a side by side comparison from your lender :)
  • August 12 2013
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Joe, is correct look at both scenarios to see what is most comfortable and affordable.  Often times a loan officer will go for what is the quickest and the most common but the important thing here is what you feel comfortable with.
  • August 12 2013
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If you can qualify for a conventional at 5% down, you can save yourself the cost of the up front mortgage insurance.  I think 640 is the min score, but check with your loan officer.
  • August 12 2013
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It is probably your best bet all though you could get a conventional loan with those scores and a 5% down payment.  Important to talk to a knowledgeable loan officer to see a comparison.
  • August 12 2013
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