What Credit Score Do You Need To Buy A Home

Q: I’ve been renting for a long time and I really want to buy a home, so I started saving my money for a down payment. What credit score do I need to get a mortgage? Carl, Lodi, NJ

A: There are different types of mortgage loan programs, and each loan program has its own minimum credit score requirement. The minimum credit score needed to buy a house can range from about 500 to 700, but will ultimately depend on the type of mortgage loan you’re applying for as well as the individual lender. A borrower can potentially obtain an FHA loan with a credit score as low as 500, while a borrower can obtain a USDA loan with a credit as low as 580. Conventional loans and VA loans typically require a credit score of at least 620 to get a mortgage to buy a house and jumbo loans typically require a credit score of at least 700 to qualify.

Regardless of mortgage loan type, borrowers with higher credit scores are seen to be less risky to lenders, and as a result, down payment requirements and interest rates are typically lower for prospective home buyers with higher credit scores. Homebuyers with poorer credit histories may have to pay a higher down payment or pay a higher interest rate in order to qualify for a mortgage loan.

Although your credit score is very important, there are other factors that lenders consider to determine your eligibility for a mortgage loan including your credit history, debt-to-income ratio, work history, down payment amount and the assets that you own. Thanks for your question, Carl.

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