What Credit Score Do You Need to Buy a House?

If you’re looking to buy a house and require financing through a mortgage loan, then you need a good credit score. Unless you’re paying cash, your credit score is something you should worry about.

Your credit score is what determines whether a lender will qualify you for a loan. A higher credit score usually means better loan terms and lower interest rates. But what credit score do you exactly need to get a mortgage loan for a house?

Credit Score Needed to Buy a House

There isn’t a specific credit score needed to buy a house. The requirements may vary depending on several things such as the lender, housing market, or loan type.

Credit Score for Conventional Loan Types

Conventional loans are those offered by commercial banks and loan associations. They usually have the sternest standard for handing out loans. Here, the minimum score needed to buy a house is 620 with a down payment of 5% or more depending on your credit score.

Credit Score for FHA Loan Types

Federal Housing Administration (FHA) loans are especially for borrowers with lower credit scores. If you have a credit score as low as 500, you can get an FHA loan with a down payment of 10% or a 3.5% down payment with a credit score of 580 or higher.

There is a chance that you might have to pay private mortgage insurance for the loan life, but that depends on the down payment size.

Credit Score for VA Loan Types

VA loan types are meant for veterans and serving military personnel and are extended to their families. This loan is sponsored by the U.S. Department of Veterans Affairs and does not require a minimum credit score for qualification.

However, many lenders of VA loans require a credit score no lesser than 620. Nevertheless, some lenders might accept a 580 credit score.

Credit Score for USDA Loan Types

Low and moderate-income borrowers can take advantage of USDA loans. Backed by the U.S. Department of Agriculture, this loan type does not have a set credit score minimum. However, borrowers need to have at least a 640 credit score to qualify for this loan.

Credit Score for Jumbo Loan Types

Jumbo loans are unlike any of the other loan types in terms of size. This type of loan usually involves large amounts of money. Jumbo loans go beyond the usual loan limits.

With borrowing such a huge amount of money comes even greater risks, which is why jumbo mortgage lenders require a credit score of at least 700 to qualify for this loan.

Can Your Credit Score Get You a House?

Generally, mortgage lenders use Fair Isaac Corp (FICO) for credit scores. Take look at FICO’s model for grading credit scores below and see whether your credit score is high enough to get you a house.

• 300-579 is poor
• 580- 669 is fair
• 670-739 is good
• 740-799 is very good
• 800-850 is exceptional