Minimum Credit Score | NC FHA Expert

Government Loan Update to Guidelines

And in the blink of an eye – while I was checking my Blackberry – there it was. More guideline changes! Holy Cow Batman!

Many of that Nation’s Banks changed guidelines to show that FHA, VA and USDA minimum credit scores (some people call them FICO scores) are going to 620. What does this mean – since FHA has an underwriting “guideline” that allows for scores even below the traditional 580, and VA doesn’t have a minimum credit score? Well, just because FHA and VA might accept and insure borrowers with lower scores – Wells Fargo, Suntrust, Countrywide, Security National Mortgage Corporation and OTHERS are not.

We do have companies that we work with that will make Government Loans to folks with scores under 620… that’s the good news. Here’s the BAD news. The rates are higher – and because we have a rate spread LAW in North Carolina – not all of those loans will be available!

Additionally – the PMI companies listed Wake County as a “Distressed” area effective February 2, 2009. This means that the minimum credit score needed for a loan that requires PMI here is now 700. That’s STIFF!

If you are considering a purchase later this year – go ahead and talk to your lender. Let us begin the work of getting your scores “tight…” especially if you think you have a low credit score! We need to start this process EARLY! Especially in view of the fact that Government Underwriting Guidelines are changing so quickly! Call Steve and Eleanor Thorne, Corporate Investors Mortgage Group, 919-649-5058.

Looking for a Home – When Do I Apply?

This is a question that was posted recently on Trulia Voices…

“Looking for a Home in the Triangle. I think I’ll be ready to purchase in March of 2009. When should I apply for a mortgage???”

People who are considering a move to the Triangle need to plan for their home purchase. If you will be in the market to purchase in 2009 – you should speak with a NC lender as soon as possible. Why?

We have our own set of unique qualifying guidelines in NC – mandated by the State Legislature. While we are a “brick and morter” state (meaning if you are a mortgage company doing business in NC you should have an office here and not just be “virtual”), there are always those with fancy footwork trying to figure out a way around the system. Better to be safe than sorry – and find a “local” to work with.

In some cases, our State Legislature defines how much a lender can contribute toward closing costs, they also dictate WHICH KIND of loan programs are available to consumers. So again, think local.

But the MAIN REASON you should speak with a lender even six or eight months before you purchase is this:

With the “mortgage MESS” of the last year, credit scores have become one of the MOST IMPORTANT parts to a loan approval… ESPECIALLY in North Carolina. Because our programs are limited, we rely even more heavily on high credit scores to qualify buyers, and get the best interest rate. If you have a “good” score of 640 – we could get your FICO score up to 720 if we had 6 to 8 months! This change in your score could mean the difference of over $75 a month in your payment!

Let’s see… $75 a month savings, live in a house for 4 years, that’s a MINIMUM SAVINGS of $3600! Just for speaking with a loan officer EARLIER in the process! So if you are considering a purchase, call now!

Steve and Eleanor Thorne, Corporate Investors Mortgage Group, 919-649-5058