We have a borrower with a 670 credit score and 5% down payment who is comparing interest rates on the web, and getting severely misled. Borrowers often do not understand how significantly low credit scores affect interest rates with conventional financing.
For borrowers with less than 20% down and lower credit scores (under 700, and especially under 680), FHA financing is often a much better alternative than conventional financing. Both the interest and the mortgage insurance rates are much lower.
Now that FHA MI rates are so much lower, FHA financing should be held in much higher esteem. We can still close FHA loans in 14 days too; FHA financing does not take longer.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646
