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Minimum Fico

Your FICO® Scores can impact your loan interest rates, terms, approvals and more.
Regular Contributor

Minimum Fico

I want to know what is the lowest Fico score to get the best interest rate. In other words what is the minimum score that when a mortgage broker sees your score he/she will be so happy to do business with you because he knows that there will be no problems getting a mortgage done and that the interest rate will be good?
Message 1 of 9
8 REPLIES 8
New Visitor

Re: Minimum Fico

My DH and I just got approved on an FHA 30 fixed for a 5.75% rate, and we have credit scores hovering somewhere around 600.   It's possible to get financed at a good rate with bad credit, but you have to have some of your stuff together.  Our baddies are all more than a year old, we had a super-low DTI, and a super-low util. on our one CC.   On the flip side, we have to pay PMI and we didn't have any cash for closing costs so those are getting thrown in on top of the home's price.  I heard the loan officer quote someone else with credit scores much higher than mine a 6.-_% rate on a conventional loan with no PMI.  I guess what I'm saying is it's possible to get a low rate, but there are a lot of other things that can affect how much you end up paying for a house.
Message 2 of 9
Regular Contributor

Re: Minimum Fico

I thougth FHA Loans you didnt have to pay PMI

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Message 3 of 9
Community Leader
Super Contributor

Re: Minimum Fico



kasowell wrote:
I want to know what is the lowest Fico score to get the best interest rate. In other words what is the minimum score that when a mortgage broker sees your score he/she will be so happy to do business with you because he knows that there will be no problems getting a mortgage done and that the interest rate will be good?



AlmostHome has the idea... it all depends on your situation.  Like AlmostHome experienced, FHA does not have a minimum score requirement... if you qualify for FHA, your rate is the same as someone with an 850 score who also qualified for FHA.
 
If you are talking about conforming financing (which is a type of conventional loan), and are putting down less than 30%, then a 680 and above score will qualify for the best rates.
 
rred, FHA loans have PMI unless the LTV is 90% or below & you are also doing a loan term of 15 years or less.  PMI on FHA is required to be paid for 5 years before you are eligible to remove it.
Helping people with Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
In Irvine, CA and lending in all 50 states

Information that is needed to determine if you qualify for a mortgage

Message 4 of 9
New Contributor

Re: Minimum Fico

AlmostHome has the idea... it all depends on your situation. Like AlmostHome experienced, FHA does not have a minimum score requirement... if you qualify for FHA, your rate is the same as someone with an 850 score who also qualified for FHA.
If you are talking about conforming financing (which is a type of conventional loan), and are putting down less than 30%, then a 680 and above score will qualify for the best rates.
rred, FHA loans have PMI unless the LTV is 90% or below & you are also doing a loan term of 15 years or less. PMI on FHA is required to be paid for 5 years before you are eligible to remove it.





I apologize for hijacking this post but I had a question. Shane, you said that if the LTV is 90% on an FHA loan then you don't have to pay PMI. Does this mean that if I put 10% down on an FHA loan I would not be required to pay PMI on the loan?

Thanks as always for your help and patience!
Message 5 of 9
Community Leader
Super Contributor

Re: Minimum Fico



smg53 wrote:
I apologize for hijacking this post but I had a question. Shane, you said that if the LTV is 90% on an FHA loan then you don't have to pay PMI. Does this mean that if I put 10% down on an FHA loan I would not be required to pay PMI on the loan?

Thanks as always for your help and patience!

90% or below AND a 15-year or less term doesn't require monthly mortgage insurance on FHA... however all FHA loans still have the 1.5% mortgage insurance premium that is charged as part of the closing costs, and it can be financed into the loan amount.
Helping people with Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
In Irvine, CA and lending in all 50 states

Information that is needed to determine if you qualify for a mortgage

Message 6 of 9
New Contributor

Re: Minimum Fico

As always thanks for your help Shane!
Message 7 of 9
Established Member

Re: Minimum Fico

Shane: FHA loans have PMI unless the LTV is 90% or below & you are also doing a loan term of 15 years or less.  PMI on FHA is required to be paid for 5 years before you are eligible to remove it.
On the site  for PMI that was posted last night (MGIC?), it showed a tack on fee of an extra .01% of PMI to make it refundable. Would that mean that adding it would allow you to get out of that 5 years as well? We're planning on paying off the mortgage within a few years after purchase so having to pay PMI even if we own 20%+ of the home to owning it outright is a bit irksome.
Message 8 of 9
Community Leader
Super Contributor

Re: Minimum Fico



reformedfamilyman wrote:
Shane: FHA loans have PMI unless the LTV is 90% or below & you are also doing a loan term of 15 years or less.  PMI on FHA is required to be paid for 5 years before you are eligible to remove it.
On the site  for PMI that was posted last night (MGIC?), it showed a tack on fee of an extra .01% of PMI to make it refundable. Would that mean that adding it would allow you to get out of that 5 years as well? We're planning on paying off the mortgage within a few years after purchase so having to pay PMI even if we own 20%+ of the home to owning it outright is a bit irksome.


MGIC only provides MI on conventional financing... FHA is government and is insured by the FHA.  Two very different things.  With MGIC (or any conventional financing PMI), once you pay the mortgage balance down to 80% of the original sales price/appraised value (whichever applies to your transaction) you can ask for it to be removed.  Each MI company has requirements on how long you must pay the PMI for.  You no longer have to pay PMI if you don't have a mortgage though.
Helping people with Mortgages (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
In Irvine, CA and lending in all 50 states

Information that is needed to determine if you qualify for a mortgage

Message 9 of 9