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Where should your credit be before getting a home loan?
bluedebAnswer
Alumni - Champ
August 23, 2020
What should your credit be at to buy a house?
The minimum FICO credit score for an FHA loan is 500 or higher. If your score is at least 580, you also need at least a 3.5% down payment. You can still get approved for an FHA loan with a credit score lower than 580 and down to 500, but you'll need a larger down payment of at least 10%.
What Credit Score Do I Need to Buy a House?
Most lenders have a baseline credit score they use to approve or deny mortgage applicants. Any score in the 700s or above is considered excellent and will most likely get you a loan with the lowest interest rate.
When your score drops into the 600s you start to be seen as a potential risk for loaning money to. A score of 680, for example, is still considered good, but when you get below 660, some lenders start saying no. For others, 640 or 620 is the line at which consideration for a better mortgage loan program may be off the table. It all depends on that particular lender and their required qualifications.
Those scores and cut-off points are for conventional fixed-rate mortgages. Other types of mortgages, such as FHA or VA, are easier to get and even designed for borrowers with credit scores as low as 500.
