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10-12-2013 04:02 PM - edited 10-12-2013 04:59 PM
My middle score is a 679. Is this one point shy of getting a conventional loan? (5% down, partially gifted.) I have one open collection on only one report for just under $1,000. It is over 3 years old, but when I disputed it, the date was updated, and that date is over 1 year ago.
I am considering buying a house that has had a prior water problem in the basement, and there is mold on some of the walls, but it looks like it has been taken care of and there shouldn't be future problems (new sump pump & concrete parging), and I don't know that I would be able to get an FHA loan unless the drywall with mold is ripped out and thrown away.
Also the PMI rates, at least for 680+, are less than FHA.
DTI is also high, 36.8%/44.5% or 40.2%/48.5% depending on how they calculate my income (it will probably be the latter, but I can get my employer to convert me to a salaried position that would change it to the former, if it helps.) I don't know what the absolute max is for conventional -- however this is NYC region where high DTI is common. There is a non-borrowing spouse that helps bring those ratios more into line, but her credit is not good enough (like, 620 middle score.)
10-14-2013 07:41 AM
The minimum credit score for us is only 620 but the PMI is higher every 20 points you go below 740, so at 679, it won't be worse than FHA. However, you should be aware that consumer credit scores are not really indicative of your mortgage credit score because a consumer report is often as much as 50 points higher than that of a mortgage lender due to using different analytics. Regardless, if the house has been repaired it should be good for any loan type.
10-14-2013 09:28 AM
i thought 680 was the middle score needed for conventional.
the Equifax FICO score that you purchase here is the same version used in the mortgage tri-merge pulls. However, the TU and EX versions sold here are different.
10-14-2013 10:47 AM
The EQ score I pull here is the exact same score used by the lender I got pre-approved by several months ago, but he is not interested in selling me a conventional loan, even with 680+ credit score, so I am looking for further information on the availability of conventional loans for my score.
Did you mean to say the PMI will be higher than FHA at 679? Mgic indicates a rate of $250/month for a $250,000 purchase at 679, which is still less than FHA, and I do not think it has an UFMIP. Also, still looking for some feedback on the max DTI a conventional loan will allow. Also can someone please verify that conventional loans are available at < 680 middle score.
10-14-2013 11:19 AM
620 FICO 5% down
PMI is about the same as FHA
10-14-2013 12:01 PM
I meant that conventional interest rates are higher while the PMI is lower, so they about offset each other.
Yes but even if that is true, the interest is 100% tax deductible (I think PMI is as of this year, but it is questionable whether it will stay that way,) and doesn't the PMI expire on conventional loans?
If someone could tell me the max DTI a conventional will allow (with possible compensatory factors of a non-borrowing spouse), it would be appreciated.
10-14-2013 12:16 PM
The absolute maximum for conventional is 50% right now with very strong compensating factors (like 740+ credit scores, large down payment over 20% down, lots of cash in reserves, etc.), so it's more likely to be the general purpose 45% max. It's possible it will go down to 43% after January 1 with the new rules being implemented.
10-15-2013 08:51 AM
Not true with us. The guidelines are 45% unless the automated underwriting system goes a little higher or lower, both of which are rare occurances.