Posted on: 05th Feb, 2013 02:50 am
Hello everyone… I need your suggestions! I'm starting to try to plan for my future as far as buying a home. I have not a clue how a mortgage works or what it entitles. I'm wanting build a small home from to ground up somewhere in PA. 3 bedrooms max, would like a basement. What would be an estimated cost for this? I estimate to be able to pay $1300 monthly on it. I'm looking to go for this in 5 years.What FICO score is needed to be in the best rate tier? I've read about fixed rate and adjustable rates, which is better??
5 Years is a long time period. Mortgage rates change on a regular basis and it's difficult to say what the rates will be after 5 years. At present, 720-740 FICO score is required to get a conventional loan. The credit score requirement may increase or decrease after 5 years depending upon the market.
Conventional lenders go down to 620 fico, the pricing is not as good as someone with 740+ fico. FHA, some lenders can go below 600 fico. Rule of thumb when you are about a year out from purchasing...Dont have a bunch of people run your credit. Dont make deposits into your checking/savings that cant be sourced, such as cash deposits. Dont quit your job or reduce your hours. Make sure you have all your required funds seasoned in your account. Payoff or paydown all your credit cards and revolving debt under 50% of the credit limit. Payoff and resolve any negative items on your credit. Good luck
