What credit score do I need to buy a house?
Nerdwallet posted a very in-depth article last year that I found very useful and wanted to share.
Please note that the guidelines for each credit score are from 2019. It is possible there could be new loan programs that came out after this post, so ask your local real estate professional for a mortgage professional recommendation to find out your potential mortgage options.
Score of 300 – 499: There are generally few mortgage options for credit at this level. You may want to try to work on bettering your credit score in order to be able to buy a home with favorable mortgage programs.
Score of 500 – 579: With a credit score in the 500s, it could be possible you could qualify for a loan insured by the Federal Housing Administration (FHA.) One thing to understand, per the Nerdwallet article, is that with a credit rating of 500 to 579, your loan may require a 10% downpayment.
Score of 580 – 619: As of right now, FHA loans allow for a downpayment as low as 3.5% of the sales price of the house. Per guidelines at this time, a FICO score of 580 or better would be needed to possibly achieve this low of a down payment.
Score of 620 – 699: This will most likely open more loan options to a borrower. Conventional loans as of right now are often doable at above 620, USDA, FHA, and VA government backed loans are usually attainable at this level.
Score of 700 – 739: There may be more lower interest rate loans available to borrowers with credit scores in this range.
Score of 740+: If you have a FICO score of 740 or higher, you may be offered a favorable interest rate, especially on a conventional loan.
There are many more details in the NerdWallet article I linked to above.
If you have specific questions about buying a home in Towson, Timonium, or the surrounding Baltimore area, please contact me. I can put you in touch with a mortgage lender who may be able to help you discover what your best loan options could be!
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