My First question is what are those FICO scores. Qualifying conventional in my opinion is the way to go especially after April 2012 because once again HUD is raising the costs of upfront mortgage insurance and the monthly mortgage insurance premium for all FHA loans.
If your credit is 680 or higher then I say go conventional and put down at least 5% and there are several options to keep the necessary PMI as low as possible so you are not adding a huge monthly cost to your payment.
If you have to raise your FICO by 40 points in three months, it is possible but hard. If you have large credit card balances you could take those balances down and that would help and would be the fastest way to accomplish a big jump like that. However without knowing your scores I can't accurately give you advice, for example if your scores are 640 and the broker needs them to be at 680, then I wouldnt believe you to have good credit. Now if you are at 680 and need to get to a 720, that just may mean she is trying to get you a better rate not necessarily to qualify.
To answer the other part of your question, I firmly believe that if you can find a trustworthy knowledgeable Mortgage Broker you will get a better deal any day of the week than a credit union or bank. Think of these entities as retail channels, like shopping at Walmart, a mortgage broker works wholesale like shopping factory direct. So the broker you are talking to is right about getting you a better deal.
Honestly now it doesn't matter which state you are in, Mortgage Brokers are all now governed by the SAFE act and have to nationally licensed as well as state licensed. They have been reguatled now heavy since 2010 by the goverment. Most brokers that are left after 2010 are the cream of the crop. Now that is not to say that there are still bad apples but you can be rest assured that more than likely you are dealing with a reputable person that has been through a lot to call themselves a licensed Residential Loan Originator.
To feel more comfortable ask for her NMLS # and go to the following website:
Consumer Access
you can search her and her company to make sure they are fully licensed in CA and you can see her previous experience and if there is any negative history.
If she doesnt have an NMLS number either she is operating illegally or she is not really a broker and has to operate under a mortgage banking service, if the latter is the case then beware on getting a better deal than your credit union or bank.
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