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Better to go fha or conventional with 678 credit?

i have down payment enough for each but where can i get the better interest rate please. let me kow if more information needed by glenaue78463418 from Vail, Colorado. Nov 24th 2014 Reply


Michael Glist (Team.Glist)
#73 ranked lender in Colorado - 27 contributions

The rate on FHA will be better but the PMI is higher, when all is said and done the payments will usually be a few dollars apart. Best bet is to go FHA and then build credit up over 720 (tips from your lender are available on how to do this) and then to refinance into a conventional loan lowering your payment and possibly getting rid of PMI. I hope this helps, if you have any questions feel free to reach out to me.

Nov 24th 2014
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Michelle Curtis Loan Originator NMLS 401173 (EmbassyFundingLLC)
#29 ranked lender in New York - 2,236 contributions

If you are looking for interest rate FHA will be the answer. You should speak with a mortgage pro and let them give you the rates for both and the monthly MI payment for both. The interest rate will be better with FHA but the monthly mortgage insurance will be higher and is for the life of the loan.

Nov 24th 2014
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,439 contributions

Its is a give and take. Let us assume you can do 5% down for both loans. Your interest rate will be lower on an FHA loan, but your up-fromt MIP and monthly mortgage insurance will be higher. I just ran a calculation, and the OVERALL payments TODAY are very similar. But, on a conventional loan, you can drop the PMI, whereas on the FHA with a minimum down payment, the PMI is there for the life of the loan. If you could improve your credit score to over 740, the conventional loan works out to be much better both today, and in the future.

Nov 24th 2014
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,788 contributions

The better interest rate will be FHA, but it will cost you more since FHA has the most expensive mortgage insurance of any loan product.. Also, with FHA MI, it's there for the life of the loan.. the only way to remove it is to pay off your loan or refinance. With conventional, once you reach 24 payments, and you have 20% equity or more, you can contact your lender and request it be removed, and you wont have to refinance to do it.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

Nov 24th 2014
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I would recommend a conventional for two reasons. First, an FHA loan has a big upfront mortgage insurance that is added to your loan balance. Second, the monthly mortgage insurance is also higher. Your credit score is plenty good to get a great rate and very good rebate (money to pay loan costs and taxes and insurance). I think you are in a good spot to get a great loan. Let me know if I can help. Mark

Nov 25th 2014
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Chris Neuswanger (mtnmortgageguy)
#94 ranked lender in Colorado - 84 contributions

I noticed you are in Vail, I'm just down the road in Avon. Please give me a call and would be happy to work through your options. Also, if you planned to buy a condo beware there are only a couple of condos in Eagle County that are FHA approved. Townhomes, duplexes and single family homes are eligible. My web site is www.mtnmortgageguy.com and there is a link on the home page to more info about FHA vs conventional financing. Chris Neuswanger, Macro Financial Group;

Dec 1st 2014
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Sean Young (SeanYoung)
#2 ranked lender in Colorado - 1,106 contributions

If you qualify for both, I would go with a Conventional loan over an FHA loan. The rate will be slightly higher with Conventional, but your mortgage insurance will be slightly lower. If you can do a 10% down payment your mortgage insurance will be less than if you do the minimum 5% down payment. Also, if you can get your credit score to 680 there is a local program that you can do a 3% down payment with no mortgage insurance on a Conventional loan. If you would like more information you can reach me at 303-521-7169 or syoung@firstcal.net / Best wishes, Sean

Dec 1st 2014
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