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Mortgage question

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Anonymous
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Mortgage question

So, I have finally gotten rid of most of my collections. My scores are in the low 600s because of high utilization. However, I am hoping to pay down a lot of that within the next 6 mos. I would like to apply for a mortgage within the next 6 mos. I would love to hear what some of your scores were when you got a mortgage. Is it realistic to get a decent rate with scores around 640-650? That is what the score simulator says my scores would be if I pay down some of the debt . How much of a down payment would I need? I am hoping for 10% but may just need to do 5%. Any advice would be appreciated. Thanks
Message 1 of 5
4 REPLIES 4
trnl2016
Regular Contributor

Re: Mortgage question

Hi Justinb... I have a feeling you might get more/better answers in the "Mortgage Loans" section of the forum. Best of luck in your quest for a home loan... I'm hoping for one myself in the next 2 years! Smiley Happy
Message 2 of 5
Anonymous
Not applicable

Re: Mortgage question

For FHA loans you can put 3.5% down. I've heard from local lenders that they are looking for a 620 mid score but if you can get the score over 660 you should be in a better position to be approved.

Message 3 of 5
StartingOver10
Moderator Emerita

Re: Mortgage question


@Anonymous wrote:
So, I have finally gotten rid of most of my collections. My scores are in the low 600s because of high utilization. However, I am hoping to pay down a lot of that within the next 6 mos. I would like to apply for a mortgage within the next 6 mos. I would love to hear what some of your scores were when you got a mortgage. Is it realistic to get a decent rate with scores around 640-650? That is what the score simulator says my scores would be if I pay down some of the debt . How much of a down payment would I need? I am hoping for 10% but may just need to do 5%. Any advice would be appreciated. Thanks

Check your FICO mortgage scores and not your FICO 8s.  The mortgage score that is used is the middle score of the three. 

 

You can get a very good rate with an FHA type loan with scores in the 640-650 range and the down payment requirement is 3.5% however there is a loan limit set by the county in which the property is located.  There are other criteria to getting approved too - income, debt and DTI.

 

There are conventional loans available, but if you are looking to put down a small down payment (less than 20%) you will have to have PMI which is score sensitive. The lower scores charge higher amounts for PMI - much higher than FHA's MIP.  Plus you have to qualify for PMI and with FHA MIP is automatically approved when you get the loan approval.  

 

When you apply, have the lender give you both loan estimates so you can compare the two types of loans. 

 

 

Message 4 of 5
Anonymous
Not applicable

Re: Mortgage question

Thank you
Message 5 of 5
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