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Conventional Mortgage with a 674

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Conventional Mortgage with a 674

Hello, 

 

I am looking at buying a house.

 

Heres the scoop, I will be selling my house (paid off with approximately 110k in equity.)

 

I plan on buying a new house and putting 20% down on a $280K house.

 

My current debt is a truck payment owe $5000 payment is 457 a month.

 

And a RV Owe $26,000 payment is 280 a month.

 

My mortgage credit scores are 670, 674, 691

 

The house payment With insurance and taxes is 1462 used 4.5% apr in the calculation 

 

My monthly income is $6,000

 

I only have $4,000 in my bank account as I paid off a lot of debt. And my house sale will fund my down payment.

 

(a) is my credit score good enough to go conventional

(b) is my CTI good enough for conventional

(c) What should I expect for an interest rate with a 674 middle mortgage score and 20% down on a $280k house. I know they're increasing daily.

 

 

Any problems you can see with my portfolio and obtaining a mortgage?

7 REPLIES 7
Moderator Emerita

Re: Conventional Mortgage with a 674


@BDR1 wrote:

Hello, 

 

I am looking at buying a house.

 

Heres the scoop, I will be selling my house (paid off with approximately 110k in equity.)

 

I plan on buying a new house and putting 20% down on a $280K house.

 

My current debt is a truck payment owe $5000 payment is 457 a month.

 

And a RV Owe $26,000 payment is 280 a month.

 

My mortgage credit scores are 670, 674, 691

 

The house payment With insurance and taxes is 1462 used 4.5% apr in the calculation 

 

My monthly income is $6,000

 

I only have $4,000 in my bank account as I paid off a lot of debt. And my house sale will fund my down payment.

 

(a) is my credit score good enough to go conventional

(b) is my CTI good enough for conventional

(c) What should I expect for an interest rate with a 674 middle mortgage score and 20% down on a $280k house. I know they're increasing daily.

 

 

Any problems you can see with my portfolio and obtaining a mortgage?


I see that your mid-mortgage score is 674 so obtaining a conventional loan is very possible. It is especially good that you are putting down 20% so you won't have to pay PMI. 

 

I don't know what your rate will be, it will be based on not only your score, but also the lender that you choose to use.  Money is a commodity so you will want to shop with several lenders to see what you will end up paying. You can shop them without having them pull your report, but when you apply, they will need to pull your report to give you a more accurate idea of what your rate will be. 

 

It isn't an issue at all to have the source of your down payment funds come from the sale of your home. In fact, it is completely normal Smiley Happy

 

Do you have any idea why your scores are in the 600's? What are the factors listed on your credit report? Do you have any open revolving accounts (credit cards)?

 

 

 

Message 2 of 8
Established Member

Re: Conventional Mortgage with a 674

Low scores are from lates 4 years ago. Haven't been late since. Was just young and dumb. 

 

I was was just quoted 5% this seems high to me but I know they're cranking up fast. 

Message 3 of 8
Moderator Emerita

Re: Conventional Mortgage with a 674


@BDR1 wrote:

Low scores are from lates 4 years ago. Haven't been late since. Was just young and dumb. 

 

I was was just quoted 5% this seems high to me but I know they're cranking up fast. 


That sounds high to me too. Was that a big box bank type or a regular mortgage banker type lender that originates, underwrites and funds their own loans. 

 

Message 4 of 8
Moderator Emeritus

Re: Conventional Mortgage with a 674

Fannie LLPA list 674 vs. 680 as full 1% difference; 4+1 = 5 so I'm not certain that's an unreasonable rate.

 

 

 

I know FHA is a PITA but I wouldn't be willing to give up that much in interest rate personally.  Have you already optimized your file as much as possible OP?




        
Message 5 of 8
Moderator Emerita

Re: Conventional Mortgage with a 674


@Revelate wrote:

Fannie LLPA list 674 vs. 680 as full 1% difference; 4+1 = 5 so I'm not certain that's an unreasonable rate.

 

 

 

I know FHA is a PITA but I wouldn't be willing to give up that much in interest rate personally.  Have you already optimized your file as much as possible OP?


I don't know Rev - it is easier and cheaper to buy down the interest rate than to pay PMI when the OP has plenty of funds to do so. How much will it cost to buy down? I don't know, but it is only a one-time fee rather than UFMIP + monthly MI that FHA requires. The OP can contact the original lender and others to see what they charge for a buy down. He also can check to see if an additional 5% down makes a difference in the rate (25% rather than 20%). Or maybe he has some other compensating factors.

 

As to score optimization, it seems to me that 4 years since the last late would have far less impact on the score than something else that maybe the OP hasn't noticed on his report.  OP, try visiting the rebuilding forum to see what can be done to increase your score.  Did you get your mortgage scores after all of your accounts were paid down or paid off? 

Message 6 of 8
Moderator Emeritus

Re: Conventional Mortgage with a 674


@StartingOver10 wrote:

@Revelate wrote:

Fannie LLPA list 674 vs. 680 as full 1% difference; 4+1 = 5 so I'm not certain that's an unreasonable rate.

 

 

 

I know FHA is a PITA but I wouldn't be willing to give up that much in interest rate personally.  Have you already optimized your file as much as possible OP?


I don't know Rev - it is easier and cheaper to buy down the interest rate than to pay PMI when the OP has plenty of funds to do so. How much will it cost to buy down? I don't know, but it is only a one-time fee rather than UFMIP + monthly MI that FHA requires. The OP can contact the original lender and others to see what they charge for a buy down. He also can check to see if an additional 5% down makes a difference in the rate (25% rather than 20%). Or maybe he has some other compensating factors.

 

As to score optimization, it seems to me that 4 years since the last late would have far less impact on the score than something else that maybe the OP hasn't noticed on his report.  OP, try visiting the rebuilding forum to see what can be done to increase your score.  Did you get your mortgage scores after all of your accounts were paid down or paid off? 


Good point as always S10, just figured the option should at least be looked at in the scenario, and a bit of rate shopping using Zillow or similar might not be a bad idea either to your point.




        
Message 7 of 8
Valued Contributor

Re: Conventional Mortgage with a 674

My pricing engine gave me a 5% rate at 674 and 4.75% at 680. I'd have your lender run a score simulator to see how you can most cost effectively get to 680 and then go conventional.

Mortgage Loan Officer licensed in CA & AZ


Message 8 of 8
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