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First Time Noob Question and Advise

New Visitor

First Time Noob Question and Advise

Hello all,


I am facing a decision that I am not sure if I should make it. Here is my details


  • First Time Home Buyer
  • Current Credit Score ~ 622
  • Was laid off in 2007, when Credit Score was around 760. This resulted in debt accumulation and deragatory items on the credit report
  • Recently (past couple months), paid off around $15,000 in collections, which was all that was left. So no collection Balance anymore.
  • Need to purchase a House
  • Lender approved me of $268k with 3.5% down for 30 yr FHA at 4.25%
  • I decided to go with a Local Bank instead of any regional or national major bank.
  • I plan to meet with US Bank, who I have peopel telling me, provided 3.5% FJHA 30 yr.


I am thinking this is a little bit more than the normal quote he gave me before of 3.5%. Also, the max is at $268,000 instead or the normal $271,000 ceiling for the state of Arkansas.


Would you say this is a good rate,  or should I shop around, with the Credit Report that I have printed and the CreditKarma details? Or Accept the offer?


I have revolving credit cards with $5,000 in Credit limit, that I am revolving at 65% usage to create a positive credit.


I have a really good job, and intend to have periodic raises, so I intend to refinance the moment I get my credit score in upwards of 700.

Also, with positive credit, I plan to use the pre-approved Capital One Financing for a new Car, but that is obviously after BUYING A HOUSE.


Any advise would be highly appreciated.

Message 1 of 4
Regular Contributor

Re: First Time Noob Question and Advise

4.25 is a good interest rate. You can always meet with the other bank and see if they do indeed offer 3.5% but that is usually reserved for customers with the best credit. I got my mortgage at 4.375 and I was very happy with that since my credit was low, but my credit was higher than yours, so I would take the 4.25 and run with it. Remember also that the amount you are approved for is based on your DTI. So if you have DTI that is a bit higher that could explain why you were approved for less than you thought you should have been.

Message 2 of 4
Regular Contributor

Re: First Time Noob Question and Advise

Hello, I'm not one to be giving mortgage advice in any way shape or form. I'm only posting because you mentioned that you are using 65 percent of your revolving credit. I'm under the impression that for best scoring that should be under ten percent. I would think that utilizing 65 percent would hurt your score but I could be wrong. 

Message 3 of 4
Senior Contributor

Re: First Time Noob Question and Advise

A 4.25% mortgage rate on a FHA 30-year fixed loan is very good. That is exactly what I closed at on July 31st. I am a sales counselors with a national builder and our mortgage company was quoting 4.25% just this past weekend. Keeping you balances as clost to 3% [or less] will definitely help your scores. Util level above that will have the opposite effect on your scores.

Message 4 of 4
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