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Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Has anyone heard that the FHA minimum score is going up to 640?

The only thing about refi-ing out of an FHA is that the interest rate may be increased by the time you're ready to refi and you might not save as much money or it could cost more money. And then that traps you with the PMI. The only good news is PMI is a % of the principal amount owed, so as your principal goes down, your PMI goes down also.
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Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: Has anyone heard that the FHA minimum score is going up to 640?

oh crap I didnt know that, that is cool.

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Has anyone heard that the FHA minimum score is going up to 640?

Yes that is the nice thing. Knowing that the $346 per month will go down over time. I will enjoy writing off my PMI on next years taxes. That was another thing that recently changed. PMI was not a tax credit last year.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: Has anyone heard that the FHA minimum score is going up to 640?

But ill be happy when that damn write off is gone.

New Member
Posts: 11
Registered: ‎02-07-2013
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Re: Has anyone heard that the FHA minimum score is going up to 640?

So by manual underwriting, that means they dont use DU at all?  I thought based on my experience all FHA loans were at some point individually looked at by a human underwriter?

Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Has anyone heard that the FHA minimum score is going up to 640?

Right but the human underwriter simply verifies DU and sends out conditional approval. Now the human underwriter will have to do what DU normally does automatically and make a more informed decision.
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Regular Contributor
Posts: 124
Registered: ‎01-11-2013
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Re: Has anyone heard that the FHA minimum score is going up to 640?

PMI for the life of the loan will be applied to 30 yr loans, I don't beleive it will be asssed for the life of a loan on a 15 yr loan.  At least that is what I thought I read, lol.....anyone else know for sure if it applies to only 30 yr loans?

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Valued Contributor
Posts: 3,406
Registered: ‎12-19-2012
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Re: Has anyone heard that the FHA minimum score is going up to 640?

The link here explains that PMI will be required until the principal balance is 78% for terms less than or equal to 15 years.

The letter states that PMI used to not be required for terms less than 15 years but it will be required after June 1st.

http://portal.hud.gov/hudportal/documents/huddoc?id=13-04ml.pdf
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! :smileyhappy: Last App: 4/5/13 Gardening until July 2014
Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
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Re: Has anyone heard that the FHA minimum score is going up to 640?

The truth is, while it does matter what FHA minimum scores are according to FHA, the Lender overlay requirements is all that will matter.

 

If FHA minimum scores end up being 640, you can count on many lenders overlay requirements will increase also.

 

The lenders today saying FHA scores need to be 640, is just that Lenders overlay requirements.

Good Luck
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Valued Contributor
Posts: 2,300
Registered: ‎08-25-2011
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Re: Has anyone heard that the FHA minimum score is going up to 640?

They cannot go up much higher, FHA would no longer be a good option.

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