What credit is needed for the loan rates quoted on various sites?

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Simple question. I want to buy a house in January in California and I see that the rate today is 6.103% for a 30 year fixed mortgage. What FICO score correlates to those rates? My wife and I each had FICO scores of 719 and 721 six months ago. We have paid down maybe 30% of our debt. We make about $ 80,000 gross combined, have a $ 530 car payment, and are looking for a $ 300,000 mortgage with no money down.

I know that there are many factors, but what range can we expect in regards to a realistic interest rate for us?
I have $ 60,000 of available credit on credit cards to use and I have $ 6062 in credit card debt on a 0% interest card for 12 months that expires in January. I have been paying the minimum and saving the rest for when the 0% term is up rather than using the money to put down on a house.
Pay off credit card and have $ 4000 in savings or don’t pay off the card and put down $ 10,000 for the house?

  1. Reply
    February 19, 2011 at 8:43 am

    so with no money down the closest you can get is fha or conventional with a down payment assistance where the seller gives 3% to a non profit org and the non-profit org gifts that money to you and wa-la no money from you, except for closing cost. if the seller is willing to give you 6% than thats the down payment and closing cost and for fha you can have a fico score around 600 and you will get approved for conventional you are looking of your lowest score above 680. you are going to have pmi (private mortgage insurance in there, since you wont have a 80% loan to value. good luck. happy spending!

  2. Reply
    February 19, 2011 at 8:52 am

    There is no direct correlation between your FICO score and those rates. However, the better your FICO score, the more likely it is that you can secure a better rate than someone with a low FICO score. The range you are talking about is pretty good. Generally speaking if you are between 750 and 850 you will get the best interest rates, but, as you point out, there are many factors.

  3. Reply
    February 19, 2011 at 9:47 am

    Here is what can be done today based upon your information:

    5% downpayment on a 30-yr fixed rate mortgage at todays rate of 6% = monthly payment of $ 1708.
    3% downpayment (FHA at the same rate) = $ 1744/month.

    100% financing is not available (on the conventional, secondary market) for your loan due to your income and the loan size. You may be able to get a sub-prime loan or an Alt-A loan at those terms but your rate will be significantly higher. Maybe in the mid 7% range, maybe over 8%. The problem will be acquiring mortgage insurance as those companies will not give insurance on 100% LTV loans anymore. The higher interest rate will jack your payment up over the $ 2000/ month range and that is without adding anything for escrow of taxes and home insurance.

    Depending on the loan program, down-payment assistance my be available and allowable.

  4. Reply
    Mrs HarleyBrat
    February 19, 2011 at 10:32 am

    your income vs. outgoing expenses (debt to income ratio) looks fine – I’d pay off the credit cards and do less down payment (because the less credit debt owed increases your DTI) and may raise your score a bit more – not like you need it you both have very workable FICO scores – use what’s left of the $ 10K (after credit paid off) so take the $ 6K towards down payment (any balance of down paymnet get it thru gifted program) and have seller on any purchase pay your title and closing costs – (a smart Realtor can do that – so get one) and go see a loan officer – tell them to do it this way (run the above scenario) you’ll be mildly surprised – good luck

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