530: Minimum credit score required to qualify for an FHA loan and satisfy FHA Credit Requirements
530-579: Credit scores in this range will qualify for a minimum down payment of 10%
580: Minimum credit score required to qualify for a minimum down payment of 3.5%
620: Accepted by a small number of mortgage lenders
640: Typical minimum credit score required by mortgage lenders.
Alternatively it may be that you`re looking at a 30 year loan with the rate fixed (locked) for 15 years at which time you would either have to pay it off in full or refinance the remaining principal balance under terms set in your mortgage. That new rate may or may not be capped at a certain %.
It sounds as though you may be looking at an unusual loan. You,d be well advised to have another banker or loan officer check it. Rate is important, but it,s not everything. Be sure to check such issues as prepayment penalty, closing costs, apr etc
Best of luck and happy house hunting! Call if we can help.