You’re ready to begin applying for financing, but what kind of credit history do you need to get a mortgage with an affordable interest rate?
Unfortunately, there’s no magic number to define. Banks, credit unions, and online lenders will all have their own criteria and limits, so once you’ve researched all of your top picks for financing, it’s best to call ahead and ask before making an official appointment. However, we can still work within a range of numbers so that you don’t walk into your financing unprepared.
The range of credit is represented by a three-digit number ranging from 300 to 850. Obviously it will be very difficult to get the mortgage you want from 300 – 650 because you are considered a “higher risk” than other borrowers. They think you have a greater chance of becoming delinquent on payments.
Mid-range is considered 650 – 700. Most first-time home buyers will find themselves in this position. With these numbers you can expect to get a lender with few issues. But it’s best if you can try to work on increasing your score over time so you can get the best deal possible.
The best case scenario is 700 – 850. This will qualify you for excellent rates, and you won’t have any problem getting a home mortgage.
Want us to get even more specific? Here are a few examples of major providers who offer financing and their minimum requirements:
- Jumbo Loans – 700
- USDA Loans – 640
- 203k Loans – 620
- Conventional Loans – 620
- Fannie Mae Loans – 620
- Freddie Mac Loans – 620
- VA Loans – 620
- FHA Loans – 580
Those seeking a “general number” to hit should try and reach, at the very least, 600. Do you have less than ideal credit? It’s no problem. As you can see, an FHA loan can go even lower with a score of 580!
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