Can I use my conventional to FHA mortgages?

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I am 40 year fixed rate loans classic kicks, but my. Can this loan to FHA loan be modified? With a credit score of 530?

  1. Reply
    patrick p
    April 30, 2011 at 12:41 am

    I actually am rather fit to answer that question as I’m refinancing into an FHA myself right now.

    The minimum credit score for FHA is 600. You may find SOME more liberal companies that can push it to 580, but other than that, you’re honestly out of luck.

    Also, to get an FHA, you’d probably be required to get enough cash out of your equity to pay off any debts in collections – I’m only speculating here, but if you’re at a 530, I’d imagine there may be more dollars in collection than there are in equity.

    I wish you good luck, and if you click the e-mail link in my profile, I can refer you to some AWESOME FHA brokers, but honestly, I wouldn’t get your hopes up.

    I only was able to get 12% two years ago (in a MUCH BETTER lending market) with a 549, hence why I’m refiing now.

    The one thing you have on your side is the amount of “bailout’ legislation due to the “sub-prime” crisis – look into it, I think the gov may be FORCING banks to work with lenders who are haveing trouble affording their mortgages.

  2. Reply
    April 30, 2011 at 12:56 am

    If you cannot make your payments on a 40-year conventional loan, what makes you think that the payments will be any lower for an FHA loan? They won’t.

    A 40-year loan has just about the lowest payment arrangement possible. If you can’t afford that, you probably have a house that is too expensive for you. I recommend looking for a cheaper house and selling the one you’ve got. Getting an FHA loan will not change the payment terms at all. It just changes who “insures” your loan in case you default (stop making your payments).

    You’ll sleep much better with a home that you can actually afford. Don’t listen to “hype” that lead you to believe that there’s a “silver bullet” (like FHA). There are no silver bullets and there is no free lunch. Any lender expects you to pay back the loan according to the terms. They will set the interest rate according to the amount of risk that you take.

    Good luck!

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