Conventional loan

[Warrior2000]

Three months ago, we received a pre-approval letter to start building through our lender. We went with FHA to start build in hopes of getting approved through conventional later down the line due yo my wife's middle score being 608. We were hoing to be at 620 once we financed once house was built. Proud to say that her credit jumped up to 641 since then and we were told by lender that we were golden for conventional. Prior to receiving the letter we requested the lender submitt our paperwork to underwritter which was done and preapproved.

Once ur credit is acceptable, can we expect any surprises when finally applying for convetional loan since we were already approved for fha with lower credit? I understand that for convetional the magic number is 620.

What type of scores affect the APR?

[StartingOver10]

For conventional the "magic number" occurs at about 680. You can get approved for a conventional loan at less than 680 but the PMI will be comparable to the FHA mortgage insurance. The higher your score, the lower your interest rate (for conventional) and the lower the rate for mortgage insurance. If you can manage to get your mid score above 720 than the mortgage insurance is much lower than the FHA mortgage insurance.

[Warrior2000]

I hate to say this but at this point I would be fine with PMI as long as our loan is approved. My credit is hovering around 680-700 and when we started this process my wife's credit was at 508 mid score so I'll pay a little extra for a few years

[Warrior2000]

Bump

[KatieKatie]

Hi, I'm sure Shane or Dallas could provide a very thorough answer to your question, but I'll share what I know. Myfico provides the following breakpoints for changes in mortgage rates. 760-850; 700-759; 680-699; 660-679;640-659;620-639.  The difference between each rate appears to vary by between 20-50bps, and this of course does not account for difference in MI costs.