Well, today I went to see my LO for the first time and he was awesome! I now have a gameplan as to what I need to do become a homeowner. After running the numbers for different scenarios, best case, I could qualify for a $156K new construction home, 3.25% 30yr fixed FHA interest rate and seller paid closing costs with a 640 FICO mortgage score and 3.5% down. Worst case, I could qualify for a $129K townhome with a 3.75% 30yr fixed rate with a 620 FICO mortgage score; however, considering for an extra 20 points, I could have a home built to suit and lower interest rate...I am definitely pushing towards that goal!
By end of April, all of scores from EQ, EX & TU should update with my 1% utilization. Then, I will repurchase my mortgage scores from all agencies and see where to go from there. Hopefully, the lowest middle score will be at that threshold, if not, I will wait a few months until it does. I'm thinking I'd be happier with a house and lower interest rate later, as opposed to a townhome (with HOA fees) and higher interest rate sooner!
Question though:
If May came, and I my score was 620 at preapproval and contract signing, but 6 mos later after the home was completed and ready to close, but my score increased to 640, could my interest rate drop to the 3.25% or would I be stuck at the higher rate? ( I hope that makes sense)
Hypothetically speaking, my score could continue to increase during the building phase.
