First time homebuyers sometimes find themselves embarking on a new adventure for which they have little or no preparation. Getting all of your ducks in a row before house hunting will help you become a little more on guard. One of the first matters up for consideration is your credit score. You may be wondering, “What credit score do I need to buy a house?” While there’s no specific score that will qualify you to buy your first home, there is a range that will get you there, and the experts at The Scherer Team have put together some helpful tips for you. Here’s what we know…..
For those who will be applying for an FHA loan, a minimum score of 580 is required to qualify for the low down payment option (3.5%). You won’t, necessarily, be denied if your score is under 580, but a down payment of 10 percent may be mandatory.
For a conventional loan, different lenders will have different requirements. A “ball-park” figure of 640 or more, with a hefty down payment, could get you qualified. However, there are other determining factors, so the higher the score, the more likely your chances of approval.
If you are purchasing a rural property, first time buyers can take advantage of a zero down home loan with a minimum score of 620. This is a government backed loan that has location restrictions as well as maximum income restrictions.
Most VA lenders use credit scores to determine eligibility. This can vary from lender to lender, but most are looking for a minimum score of 620. Of course, these loans are only given out to qualified veterans.
In a nutshell, the minimum requirements are listed above. A higher score is always better because you are able to take advantage of lower interest rates and lower down payments. Taking time to clean up your credit, if your score is on the lower side, is highly recommended. It can end up saving your thousands in the end.
Have more questions? Contact the Scherer Team today at 888-300-4431 to schedule a complimentary consultation!