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Loan and Mortgage Questions - FHA - Can I qualify - any Suggestions

Hello, I live in the Northwest Suburbs of Illinois.  I am looking to purchase a new home/condo/townhouse.  Recently ran my credit and my scores are 631,625, 637.  Would a FHA loan be the best way to go?  I've heard that 620 and 640 are minimums to actually get the job done?  Which one?  Say I was looking to purchase a property in the 125,000 to 150,000 range.  What should I expect as far as to qualify for the loan and costs?  Closing costs, Fees, Down Payment, ETC?  And taking into consideration, this information what about would be an expected monthly payment structure?

Thank You
  • September 07 2013 - US
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Answers (2)

As Barb said, your best option is to have a conversation with a seasoned loan officer and they can help you create a game plan for your future purchase.
Your scores are on the border. However, for FHA, some lenders go below 600 depending on your down payment.
I have a min of 620 while others are at 640. Either way, I would focus on saving as much as you can and then see what you can qualify for based on your cash available for closing costs and down payment. The down payment assistance is nice but, I am a big proponent of having your own money as it shows you are financially stable enough to take on the cost of a home and its upkeep.

All The Best!
 
  • September 08 2013
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Generally you will find lenders looking to see a mid-score of 640 for an FHA. Not sure where you obtained your scores, but it's always a good idea to have a lender run your report rather than relying on the "educational" scores provided by online services. Do this cautiously, though, if your scores are tipping on the edge, having multiple runs on your credit could be detrimental. Best bet is to find a loan officer that you feel comfortable working with and then allow your credit to be run. In the meantime, you can still pick up the phone and shop around for rate, closing costs, etc.

Just FYI, the Illinois Housing Development Authority (IHDA) offers down payment assistance and also scores down to 620.
  • September 08 2013
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