Spoke with one of the lenders I work with this morning. After informing me of the raised minimum FICO score for FHA, to 640, he explained it would make more sense, across the board, to have our buyers go with a Conventional Loan at 5% down, as opposed to 3.5% fown on an FHA.
Some of the advantages he explained are: slightly lower monthly mortgage payments, slightly lower monthly Mortgage Insurance Premiums, and slightly easier lending guidelines.
Remember, when performing an FHA loan, since California is a community property state, the lender will take the spouses derrogatory credit marks into consideration! Not good, if the non-borrower has a short pay, bankrauptcy, or foreclosre on their credit!
Before deciding to go FHA, make sure you talk to your lender about Conventional options!
Also, one more tip he give me, get a second or even third quote from a non-credit union lenders, when doing an FHA loan with a credit union!
GOOD LUCK!
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