What type of loan would be best?

[Anonymous]

I need a little help on this.  We got a preapproval for a loan with a mid score of 692 and I was wondering which type of loan would be best for us.  I know the rules are changing for FHA and I'm not really sure what the difference is between conventional and FHA.  Any help would be appreciated.  Also since the preapproval we paid off a credit card would that raise our score anymore?

[tooleman694]

Typically it is always better to go conventional if you can do it.

Your rate will be a little higher but you will save money when it comes to PMI.

[JM-AM]

I agree typically it would be better.

The qualifications are different, DTI is different, and your down payment would be different.

Most choose FHA over conventional because of credit profiles (even though you have good scores your credit profile would still play a factor), lower down payments, higher DTI limits.

As of right now you probably should weigh your rate against your MIP you would pay. Especially since your rate on your score would most likely not qualify you for top tier rate going conventional.

Ask your LO or Broker to give you a comparison between both options. Shouldnt take them but a few minutes to do.

[MovingForward_2012]

Agree, given your scores, you might get a higher interest rate going conventional that might make the mortgage payment more expensive than going FHA with PMI. Paying off that credit card should help your score. How much credit were you using before you paid it off? How much are you looking to put down on the house?

[BCullum]

I had the funds to do a large downpayment, and due to my good credit as well as my wifes. We were able to do a conventional mortgage, and avoid PMI all together.