Crap! Middle Mortgage FICO at 615

[AutoBot]

I think I am stuck with a FHA mortgage with $11,000 in closing costs and $177 per month in mortgage insurance because I can't seem to get my middle mortgage FICO up to 620. So when I refinance, I am essentially throwing away that initial $4500 mortgage insurance premium included in closing costs. My mortgage FICO for Experian was 614 back in September, which means everthing else remaining the same, that score increased 1 point in 2 months.

636 - EQ FICO8

637 - TU FICO8

613 - EX FICO8

618 - EQ FICO5

606 - TU FICO4

615 - EX FICO2

[Anonymous]

620 doesn't open PMI free mortgages..... unless I am missing something pretty significant.

[StartingOver10]

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@AutoBot wrote:

I think I am stuck with a FHA mortgage with $11,000 in closing costs and $177 per month in mortgage insurance because I can't seem to get my middle mortgage FICO up to 620. So when I refinance, I am essentially throwing away that initial $4500 mortgage insurance premium included in closing costs. My mortgage FICO for Experian was 614 back in September, which means everthing else remaining the same, that score increased 1 point in 2 months.

636 - EQ FICO8

637 - TU FICO8

613 - EX FICO8

618 - EQ FICO5

606 - TU FICO4

615 - EX FICO2

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You can get a conventional loan with a mid-score of 620; however, if you are putting down less than 20% your PMI is going to be very, very high. Much higher than the normal MIP rate.  Take a look at this PMI rate card as an example. https://www.mgic.com/pdfs/71-61284_bpmi_monthly.pdf  The matrix shows the various rates using different LTV's and scores and coverage rates.

The breakeven for conventional loans vs FHA loans is right around 680 mid score.

What you can do to minimize your loss of paying the UFMIP on an FHA loan is put down 10% or more so that your MIP drops off automatically after 11 years.  This is the only way to remove MIP from an FHA loan without refinancing it.  Otherwise, it stays for the life of the loan if your downpayment is less than 10% of the purchase price. The good thing is this: you still get a very good interest rate and when the MIP drops off you have the benefit of that rate without a refi. Who knows what the rate will be in 11years??? Could very well be much higher. 

[Revelate]

If you're anywhere around a 620 you should be in FHA or anywhere else besides conventional, nearly regardless of MIP.

Unless you're putting down in excess of 30% Fannie will tack on 3% or more to their base rate at a 620, and that's just the baseline LTV adjustment.  Nobody should be getting a 7% mortgage currently.  Even putting 31% down you still get a non-trivial additional APR... FHA is a sweetheart deal if you're playing at that credit score, take that instead.

Should note if you're putting in excess of 30% down anyway, there may be portfolio-style loans available which might be to your advantage but I don't know personally any lenders which are doing that.  My former employer that got purchased has nixed their more creative mortgage offerings unfortunately.

[AutoBot]

We are putting 10% down on the mortgage. The interest rate is 3.625% for 30 years. It says the MI of $177 will go away after 11 years.

[Anonymous]

What's bringing your credit down?  If you throw some specifics out there (negatives, util, etc) we may be able to guide you on how to bring the scores up.  

[DallasLoanGuy]

sometimes it makes more sense to do a 'pay for delete' on an old collection than to throw it away on pmi.

can the loan officer run a score simulation for you? if not, see if you can find one that will.

[AutoBot]

I have 2 charge-off accounts on my reports that are the main reason my scores have remained flat for so long.

Kohls - $2000 - DOFD of Jan 2013

NFCU - $15,000 - DOFD of June 2014

I can settle both, but if I do I will take a hit on my scores because it would show paid less than full balance which would not be good right now.

[Anonymous]

You should look at Wells Fargo, their yourFirstMortgage might be an avenue. 

Low down payment and out-of-pocket costs

• Get a conventional fixed-rate mortgage with a down payment as low as 3%.
• Use down payment and closing cost sources like gift funds and down payment assistance programs.

Flexible income and credit guidelines

• Qualify with income from rentals or from someone who lives with you but isn't a borrower.
• Show your credit history from sources like rent, tuition, and utility payments.
• Qualify with no area median income requirements.

Being an informed homeowner

• Homebuyer education may qualify you for an interest rate reduction if your down payment is less than 10%.
• With a low down payment, mortgage insurance is required and increases loan cost and monthly payment.
• See what options might be a good fit for your situation with our loan comparison tool.

I've chatted with them and there was no way that I could get them to say what a minimum credit score would be. Give them a call. 

[StartingOver10]

That loan is available almost everywhere - and I wouldn't go to WF to get it.