It's advisable you should wait for your scores to get to a 620 level, then with a 10% down payment your mortgage insurance would be less if you chose to go the conventional route. With 10% down and the best level of approval (Approve/Eligible) you should get rates in the low 6's, 2nd best (EA-I) upper 6's to low 7's, 3rd best (EA-II) low/mid 7's, and 4th best (EA-III) upper 7's or low 8's. FHA loans don't have income restrictions, but they do have loan amount restrictions (most of NC is $200,160 unless you are in Durham, Wilmington or Raleigh then it's $237,500, $230,375 or $224,200 respectively, and Virginia Beach/Newport News area it's $313,500). You should not have go sub-prime at all.
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