5% down conventional with 640 credit and 5.75%! IS IT BAD OR GOOD MORTGAGE RATE? (condo, loan)

[nybbler]

Originally Posted by vision33r

While I don't know the OP's situation, I've done multiple refi and home purchases to know what lenders are looking for. If the lender is ok with a 5% down on a 640 credit, that tells me that the borrowing restrictions imposed by the Democrats in 2010 have been removed by Trump.

It looks like Freddie Mac will buy 640 with 5% down but it'll be expensive, 2.75 points.

[jerseygal4u]

How did you all get a bank loan with that credit score?

My score was 720 yet i still got denied for conventional loans.

I had to go FHA,and pay extra for Mortgage insurance.

I pay 4% interest rate.

But the home was on the low end price wise for Nj(160,000).

[Ranredd]

Originally Posted by jerseygal4u

How did you all get a bank loan with that credit score?

My score was 720 yet i still got denied for conventional loans.

I had to go FHA,and pay extra for Mortgage insurance.

I pay 4% interest rate.

But the home was on the low end price wise for Nj(160,000).

For conventional loans, they usually require a higher down payment than FHA. That would be my guess. How much did you put down and what was your debt ration when applying for the conventional?

[lancers]

Originally Posted by Marc Paolella

The responsibility for prudent lending decisions should lie with the borrower, not the lender. It is an individual responsibility to borrow correctly, and the blame for borrowing too much should lie with he who borrows, not he who lends.


We don't need the State involved with this in any way. If people borrow irresponsibly and irrationally, the consequences, however severe, including foreclosure and being thrown out of their homes, is THEIR fault, not the bank, not their neighbor, not their parents, not society, not the Universe, not God.


We've got to keep the blame where it rationally belongs: ON THE BORROWER. Nobody forces you to borrow more money than you can repay. It is an individual responsibility to calculate the repayment terms and make a rational decision as to whether repayment is a realistic and attainable goal.


I'm tired of this "blame the state", "blame the institution" mentality. I don't care if they are willing to give you $1,000,000 in a paper bag and ask for repayment in 30 years as a balloon. I don't care how easy it seems. Nobody puts a gun to your head and demands that you borrow money. It's a CHOICE. Repayment responsibility is ON THE BORROWER, not the lender.

I agree with this 100%. I would never put myself in the position where I could not afford to pay. Back in the day when both my wife and I worked we made sure that I could pay the loan and all other bills out of my take home pay. Some people don't care but I couldn't live like that.

[jaymoney]

Originally Posted by jerseygal4u

How did you all get a bank loan with that credit score?

My score was 720 yet i still got denied for conventional loans.

I had to go FHA,and pay extra for Mortgage insurance.

I pay 4% interest rate.

But the home was on the low end price wise for Nj(160,000).

Depends on how much of a down payment you were making. Anything below 10 and it's very unlikely you'll get a conventional. But your rate is rock bottom, so, nice work!

I don't know when you bought, but you might want to look into reevaluate your house with your lender, it's probably worth more than what you bought it for and you might be able to get out of your PMI earlier than planned a a cost of about $400 to have someone reeval your house. We were shocked to find we suddenly owned 67% of our home, we'd been expecting to just make it past 78%.

[jerseygal4u]

Originally Posted by jaymoney

Depends on how much of a down payment you were making. Anything below 10 and it's very unlikely you'll get a conventional. But your rate is rock bottom, so, nice work!

I don't know when you bought, but you might want to look into reevaluate your house with your lender, it's probably worth more than what you bought it for and you might be able to get out of your PMI earlier than planned a a cost of about $400 to have someone reeval your house. We were shocked to find we suddenly owned 67% of our home, we'd been expecting to just make it past 78%.

How do you go about doing that?

Also,if I read the OP correctly,he is putting down 5% and and with a 630 credit score. He is getting a conventional loan.

I had 5% and a 720 score.

Does the OP have to pay PMI even though it is not an FHA loan?

[zhelder]

You can do a conventional loan with 5% down, but you have to pay the PMI, or pay upfront for lender PMI. I closed on my new construction townhouse last August, with 5% down and paying PMI each month. My loan rate is 4.25%, my credit score was about 770 at closing.

I know most finance gurus would say never buy a house with less than 20% down and pay PMI, but I’m happy with my decision. My home, very nicely upgraded, came to 435K. People closing now in the development are paying 460K-470K, and I bet that number will go higher for the last few people moving in. That’s a pretty good uptick in prices over 9 months.

OP, I’m guessing you may be able to do a bit better with that rate if you move quickly (rates are going UP UP UP!!!), but I think you’re definitely looking at a 5 as your first number and some extra digits after that even after shopping around.

[Ranredd]

Originally Posted by jerseygal4u

How do you go about doing that?

Also,if I read the OP correctly,he is putting down 5% and and with a 630 credit score. He is getting a conventional loan.

I had 5% and a 720 score.

Does the OP have to pay PMI even though it is not an FHA loan?

The other component is the Debt to Income ratio. I believe FHA has a higher allowance for that but I could be wrong.

Additionally, FHA made some recent changes and if IRC, they'd actually have to pay PMI for the LIFE of the loan, not just when they reach 78% Loan to Value.

In regards to the other person mentioning the eval for 400 bucks, you would want to check your loan documents carefully. Sometimes they won't take the new value and apply it to get you to below 80% LTV to drop the PMI.

[jaymoney]

Originally Posted by jerseygal4u

How do you go about doing that?

Also,if I read the OP correctly,he is putting down 5% and and with a 630 credit score. He is getting a conventional loan.

I had 5% and a 720 score.

Does the OP have to pay PMI even though it is not an FHA loan?

How you go about doing it is going to depend on when you took out your loan, as the rules changed in 2013 to, as someone else mentioned, the life of the loan.

However, there is nothing stopping you from getting another loan to pay off the FHA loan now that you own more of the house.

https://thelendersnetwork.com/fha-pmi-mip-chart/

We put down less than 20% and had a conventional loan with PMI and ours is not a FHA loan, PMI can be applied to any loan where there's less than 20% down.

[jaymoney]

Originally Posted by Ranredd

check your loan documents carefully.

This just needs reiteration. Your loan is an agreement between you and your lender, that document is going to be the basis of any conversations about what you can do about your loan, PMI, rate, whatever.