Monday, July 15, 2013 - Article by: MICHELLE DEMA - Embassy Funding LLC NMLS 854225 -
An FHA loan only requires a 580 credit score (some lenders will go even lower but usually at a high cost, and any score under 580 requires 10% down payment) to get up to 95.6% financing and up to a 6% sellers concession, the better your score the better the rate will get up to a point. FHA will allow up to a 55% back end debt ratio if you qualify.
You will also be required to pay 1.75% up front mortgage insurance premium which is added to your loan amount and financed in. You will also be required to pay a monthly mortgage insurance premium for the life of the loan at a current rate of 1.30% at 90% or lower Loan to value and 1.35% at 90.01 and up no matter what your loan to value is or payed down to.A conventional loan will require a minimum of 620 credit score for up to 97% financing, and just like FHA, the better your score the better your rate up to a point.
There is no up front premium but there is monthly mortgage insurance on any loan that is over an 80% loan to value and it is typically cheaper than FHA until you get up to 90 or 95% and then it is close to the same. Max debt ratio is typically 45% back end, in some rare cases you can get approved as high as 50% with major compensating factors.The best way to find out which is the best loan for you is to discuss your situation with a mortgage pro and let them lay out all your options for you.Call us or email us at 201-962-3555 or Team@BestMortgageOption.com for ano cost no obligation analysis of your situation ask for Michelle or Benny. We will find the Best Mortgage Option to suit your needs! Check us out at www.BestMortgageOption.comAsk us about the awesome discounts we offer heroes as a Homes for Heroes affiliate!
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