What is the credit score needed to buy a house?
Are you a first-time home buyer wondering what credit score you need to qualify for a mortgage? Tired of raising renting, dealing with property managment companies and throwin away your hard earned money? Would like a home for you and your family? Well, read this blog and I'll tell you everything you need to know about credit as it obtains to getting approved for a mortgage.
Credit is the foundation for you getting approved for a mortgage. Mortgage companies and banks, want to see a good credit scorse and payment history before giving you thousands of dollars to buy a home. Does that make sense? Start early and start using credit responsilby to show lenders you can be trusted.
An good credit scorse is between 670 to 739. But you dont have to have 670 to get approved for a mortagge. The minimum credit scorse actually to get a mortgae, can be as low as 500"s. But with a lower credit scorse, you will be required to pay off all unpaid accounts and higher down payment of 10%. However with a little work and effort, improve your credit to 620-640, the down payment would ony be 3.50%. Also worth mentioning, the higher your credit, the lower your interest rate will be. Getting a low interest rate will not only save you money with a lower monhtly payment, but save you thousands of dollars over the life of the loan.
Here are the typically and mnimum credit scores to qualify for a mortgage:
Conventional loans 620
FHA loans 580
USDA loans 640
VA loans 620
Ideally you don't want to qualify for the mnimum credit score, because some lenders will have somthing we call overlays on mnimum credit. An overlay just means, even though the FHA min credit is 580, must lenders will require a 600 before approving you.
Make sure to check your credit first, before applying for any loans. This will let you know where you are at and if you need to improve things before applying. We like to recommend credit karma to clients that would like a idea of their credit. Also Credit Karma is not only free but will show you, your payment history, utilization and if there are any deogatory remarks. Our best adivce is to follow some of Credit Karma recommends in order to prepard before you apply for a mortgage.
Here at Mortgage One, we are committed to helping first-time home buyers with all thieir home buying needs. We offer free credit advice for those looking to build, improve or establish credit. For any questions about how we can help you, don't hesitate to contact me or a member of our team.
Tim Tomkowiak
“I am a license loan officer. And I help ordinary people build equity and wealth through home ownership”
