Iwhats a good rate for FHA loan in Wisconsin?

my credit average is 590 between the three bureaus. my credit to debt ratio is roughly 60% avail.

I got preapproved for a FHA but I am wondering what I should get for an interest rate. Plus is 3% down is better to do or a DAP program. I am looking at a 75K house.

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  • 1 decade ago
    Favorite Answer

    Although FHA has been proud to say their program is not score driven, the bond market/banks that lend you the money have made the interest rate you receive based on the middle of your 3 scores (not the average!). 620+,600-619,580-599 and 579-down are usually the basic catagories. Beginning next month the rate and amount of Monthly Mortgage Insurance on an FHA loan will be tied to your credit score.

    The ratios that are important to an approval are the housing/income (estimated payment with taxes and ins. and MMI as % of gross monthly income) and total debt/income (housing plus minimum payments of other debt as % of gross monthly income). These need to be around 30% and 45% and your credit history will affect how high they can be.

    A pre-approval is not a sure thing. Be sure the person supplying the information has all of your credit, employment and income history and can document everything before taking further action. A turn-down a week before closing is the worst thing that can happen and there are no sub-prime lenders to turn to.

    If you don't have 10% or more in the bank, I think a Down Payment Assistance program is a good way to save cash . As a home owner you will discover needs for lawn mowers, paint and furniture, etc. that you do not want to end up on credit cards that first year or so. These things cost the same whether your buying a $75,000 or $300,000 home.

    Ameristar Mortgage is your local Wisconsin mortgage broker:

    Dennis Hardy

    Local: (608) 242-0826 x23

    Toll Free: (877) 240-5840

    dennis.hardy@ameristarmadison.com

    www.AmeristarMadison.com

    Visit my blog at http://www.ameristarmadison.com/blog/

  • 1 decade ago

    That is the great thing about FHA loans, they are not credit score driven, so having a low credit score will not affect your rate. The rates on FHA loans today are about 6.5%. If you have the 3% down I would go that route. A DAP is a great way to get into a house with no money out of your pocket but it inflates they sales price a little. If you can afford to put the money down that is the way to go.

    Source(s): Mortgage Consultant
  • 1 decade ago

    I write a ton a FHA loans 6.5% is a good rate. I would use DPA program, why put the money down if yoiu dont' have too. The costs excluding taxes, insurnace and pmi should be abour $2,200. Let me know if yoiu want more help.

  • Jen M
    Lv 6
    1 decade ago

    Well, your credit is horrible. What intrest rate were they quoting you. THat is probably what it will be...you probably won't get the lowest intrest rate because your fico score is low.

    Equifax says that borrowers with a score between like 530 and 599 that 51% of them will default on their loans. Since you are considered a 'sub prime' borrower your intrest rate will be higher.

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  • 1 decade ago

    Hi,

    I used "Credit Solution" to settle my debt and improve my credit score.They managed to reduce my debt up to 58%.It's legitimate. I came across this company on NBC News Special Edition.Check it out here:

    http://yatuc.com/bid

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