What Credit Score Do I Need to Buy a Home?

There are rarely hard and fast requirements for a credit score when it comes to getting approved for a loan. A higher score will result in more favorable loan terms, such as a higher loan amount or lower interest rate. A lower credit score may require a higher down payment or a higher interest rate.

Mortgages follow the same guidelines but there are a few programs with credit score requirements or tiers to allow those with lower credit scores to still get approved for a mortgage.

If you’re thinking about buying a home, you may be wondering what score you need to qualify for a mortgage. Your score is a crucial factor in determining your eligibility for a home loan. It can impact the interest rate you receive. In this blog post, we will explore what credit score is needed to buy a home. We will also discuss the steps you can take to improve your score if necessary.

If your score is 620 or higher

With a credit score of 620 or higher, you can apply for a conventional mortgage and other mortgage programs. Programs such as VA or FHA loans that work best for you. Lenders prefer a score of 620 or higher since it indicates that you have a solid history of paying your bills on time.

If your score is at least 580

You can qualify for the VA loan or the FHA loan with a slightly lower score but expect to pay a higher interest rate. As your credit increases, you might be able to refinance in the future to take advantage of lower rates. Keep in mind that interest rates do change over time, so future rates won’t necessarily be lower.

If you do have a lower credit score, talk to your lender about programs that you may qualify for as well as other factors that may help your application. For example, if you have a large down payment, they may be willing to work with a lower score. They are still required to follow lending regulations, however. One of the best ways to put yourself in the best position to get a mortgage is to maintain a good credit score.