FHA Home Mortgage Loan Interest Rates

One Response to “is an FHA better than a first time home buyers when it comes to credit score. our credit score is around 630?”

1. tushanna_m says:

   June 2, 2009 at 7:30 am

   First time buyer programs usually require less money down and are lower interest but require A+ credit ratings. In your case, FHA is the way to go because of your credit score and needing to use the dual income to qualify.

   First, a borrower with a score 680 and above may be considered an A+ loan. The loan will involve basic underwriting, probably through a computerized automated underwriting system and be completed within minutes. Borrowers falling into this category will have a excellent chance to obtain a lower rate of interest and close their loan without any delays.

   Second, a score below 680 but above 620 may indicate underwriters will take a closer look at the file in determining potential risks. Supplemental credit documentation and letters of explanation may be required before an underwriting choice is made. Loans within this scoring range may allow borrowers to obtain “A” pricing, but loan closing may still take several days or weeks.

   Third, borrowers with a score below 620 may find themselves locked out of the best loan rates and terms offered. Mortgage professionals may divert these borrowers to alternate funding sources other than FNMA (Fannie Mae) and FHLMC (Freddie Mac). Borrowers may find the loan terms and conditions less attractive than the “A” loans, and it may take some time before a suitable funding source is located.

   In the future, a high score may be your ticket to a speedy and competitively priced mortgage loan.

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