Mortgage Underwiter here . I know someone said we don’t look at credit scores and unfortunately that is not entirely true. The break point for the credit score depends on the type of loan you are interested in. For example, if you are going with a government loan such as an FHA loan or a Bond loan you could be as low as a 620 depending on your situation. The problem with this is the lower your score the higher your points and interest rate which translate to higher monthly payments or even mortgage insurance (with FHA you will have to pay MIP regardless).
Some sound advice from someone with too many years experience to share without aging myself who also survived the huge housing collapse. Don’t even look for a mortgage loan until your “mid-score” is 680. Anything lower than that and you’re looking high risk lending (potentially subprime lending). Patience and a consistent repayment history is key, your credit score is earned overtime and no one really knows 100% how it’s calculated. It’s called “Black box technology”, only the developers working for the credit bureaus fully understand the technology because it’s situational.
Another quick tip, if you have decent repayment history but hit a “rough spot”, document it. Most underwriters will work with you if you can explain why you had issues and have since gotten back on track. Also, with mortgages you can use non-traditional credit (things you pay monthly to companies that do not report to a credit bureau) some examples would be; electric bill, gas bill, cell phone, rent payment, even personal loans as long as you can provide copies of monthly checks or money orders issued for payment.
I hope this helps and good luck on your home search!!
