BEST ANSWER
The credit score requirement of 620 ifor FHA loans didn't just recently change. Many of the lenders my clients use here in Chicago required a credit score of 620 or better for FHA loans many months ago. Conventional loans require a score of 680 or better.
Your first step is to advise your attorney. The attorney will request an extension of the mortgage contingency. Then immediately start shopping for another lender AND more importantly go over your credit report closely. Is there anything on it that is having a negative impact on your score? Is there anything there that can be paid off prior to closing? If so, take care of it as soon as possible and make sure all three agencies are reporting it. This may help you to increase your score.
In regards to FHA financing, it may be best to go through a bank rather than a mortgage broker. The mortgage broker will "farm" out your loan to get the best deal possible. This might not be a big deal if your credit score were higher. But you don't want to have too many hits on your credit file. It could potentially decrease your credit score. Call or go into the bank and speak with a loan officer. Take your credit report with you and ask direct questions about their financing requirements.
And finally, remember, not all lending institutions adhere to the same strict requirement. Some are more flexible than others, but you will need to shop first.
Good luck to you!
Wed Jun 10 2009, 19:26
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