First determine what the difference in rate will be between the 695 and 704 scores.
Calculate the difference in mortgage payment based upon this difference.
If the difference in payment on a monthly basis is significant - in your opinion - then proceed on your husbands scores and credit alone.
If the difference is nominal - or not worth the time and effort - proceed with both of you.
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The next aspect of your loan application to address is what type of downpayment can you afford? If you are able to put down 20%, in most cases, Fannie and Freddie products are best. Almost without exception, lenders across the US require 740 for the best Fannie or Freddie rates. However, especially if you are putting down 10% or less, FHA is the only game in town, and most FHA lenders require only a 660 score for their best rates, although some lenders do offer discounts for higher scores.
Next, should you both be on the loan? Well, if you get you and your husband's scores over 740, and you can put down the 20%, sure. Other than that, an analysis of your incomes vs credit scores vs downpayment amount will dictate whom to include on the loan application. As you can tell, FHA is more forgiving AND requires a much lower credit score...that might be your fall back. In any case, you both may be on the title of the home without adversely affecting your loan application or rate!
Get in contact with a great lender and go over your options based on today's scores, and discuss credit rescoring based on what the lender thinks if your scores can be increased significantly. Many times, paying a lower downpayment and using the extra money to pay off other debt is smarter than putting more down on the home.
These days, rather than choosing a local mortgage broker, working with a national bank that offers products from twenty other major lenders in the US gives you a much broader choice in products and rates. Add to that the ability to raise your credit scores, many times within 72 hours, you allow your husband and yourself the most options to choose from.
Best wishes and good luck in your home search! Jim Ryan, Home Savings of America. 703 591 5626 ext 419.
First decide what kind of loan program you want. Conventional is best done with at least 700 scores. FHA is best with 660 scores. Conventional allows, in most cases gives you the ability to avoid mortgage insurance (MI) with 20% down, allows for higher loan limits and for second homes and investment properties aside from primary residence.
FHA allows for smaller down payments, in some areas down payment assistance is available,, requires MI regardless of down payment, allows for slower credit, higher debt to income ratios, offers rehab loans among other specialty products. With FHA the rate is the same regardless of a score over 660 for most lenders whereas with conventional the preferred score is 720.
You will also need to know what your middle of 3 scores are (not average).
So, think about how much down payment you want to pay, how much closing costs you want paid by someone else, if any, the size of the loan, and the type of property you want to buy. That will dictate your program choice.
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