Does a score higher than 640 matter much in FHA Loans?

[ccubedzx3]

Reason I ask is this....My current FICO mid score is 650, and I am currently at 90% utilization on the one credit card that I have.  By going through the score analyzer here, my score could potentially go up to 690-705 if I pay it down to 3% utilization. 

Is it in my best interest to pay it down to increase my score, or should I save my cash reserves for other things needed once we move in?

We plan on re=apping next month in order to close in late May.  If it matters, my wife's mid score is hovering at 705.

We were fully approved back in September when we signed a purchase agreement, before they started construction.  Back then I had a higher score than now because of my utilization was lower.

Any help you could provide would be great!! Thank you!

[foofighter74]

Shouldn't matter a great deal, though you say your utilization was lower before...hopefully you haven't added so much debt that your DTI ratios no longer qualify.

[tooleman694]

If you could get the score up that high you could switch to conventional and save some money.

[ccubedzx3]

Our DTI is in great shape, even with my high utilization

Income: $153,000 combined

Debt:

Student Loan-$127/mnth

Car 1-$215/mnth

Car 2- $415/mnth

Gap Card- $20/mnth

Wells Fargo Card- $50/mnth

Right now without a mortgage we are at 6% DTI

With the mortgage we will be at 22% DTI

We already put 3.5% down back when we signed

I don't really have the reserves to do a conventional, on top of paying our closing costs (approx $8000)

[tooleman694]

no 401k account

[ccubedzx3]

I'm taking a loan out of my 401k account to take care of closing costs.   I could probably squeeze another $6000 additionally out of it, but that would be about it...but now that I think about it, you need what, 5% at least to go conventional?  That $6000 might be able to get me right at 5% down.......interesting thought.   Thanks Tooleman...I'll have to look into that.

What Fico do you need to go conventional these days?

[tooleman694]

It all depends on your down payment.

If you have 20 percent down, you can go conventional with a 620 score.

If you have 5 percent down and a low DTI a 660 will work.

If you have 3 percent down you will need a 680 score and up.