A magic number for prime loan?

[Jim1972]

I am interested in buying my first home. Mid score is around 650. I can put 5% down. Does anyone know that magic number for prime lending? Also, Does anyone know if lenders go by current income or last year's W2?

Thanks for any help,
Jim

[bbal]

Originally Posted by Jim1972

I am interested in buying my first home. Mid score is around 650. I can put 5% down. Does anyone know that magic number for prime lending? Also, Does anyone know if lenders go by current income or last year's W2?

Thanks for any help,
Jim

Your score should be fine if its truly 650. Anything above 620 is what I would suggest for a prime or Alt-A loan. I priced out a loan for someone with a similar scenario and 620 mid-score and they were getting a very, very good rate.

For your income, you can give your current income. They will want to see 2 years of W-2's and last 30 days worth of pay stubs to verify what you put (plus verify your employment, of course).

May I suggest with your loan going 95% on one note and paying PMI (which is tax deductible if you obtain the loan this year).

Brent

[MortgageMan]

There is no magic number for Fannie Mae and Freddie Mac Guidelines. But your score is good enough to consider running through their electronic approval. If other compensating factors are strong you should be able to get some kind of approval. (There are different levels to the conforming loan approvals)

Compare different loan options; 80/15, 95 w/ PMI, and 95 with LPMI (Lender paid mortgage insurance). Ignore rate and look at monthly payment because the 95 w/ PMI will be a lower rate, but it may not be the lowest payment after PMI is factored in.

PMI is tax deductible this year. Consult an accountant to clarify the tax code. The way I understand it is that PMI is tax deductible this year if you make less then 100K household income, the loan originated in 2007 and the tax deduction is only good for 2007. They have not revised the code to make this an ongoing tax deduction. They may, but they haven't yet.