What Credit Score Do I Need to Get a Mortgage?

This is probably one of the most-asked questions by borrowers who apply for a mortgage. The short answer is that it will depend on the type of mortgage program you elect to take and other factors, such as your down payment.

Many borrowers with both lower credit scores and lower down payments are interested in what the Federal Housing Administration (FHA) has to offer. You can get into one of these mortgages with as little as 3.5% of the purchase price as a down payment and, depending on the lender, a credit score of 620 or less.

FHA will accept credit scores under 600, but lenders who take the application may be unwilling to accept credit scores that low, at least with a 3.5% down payment. While FHA loans are easier to obtain than other types of loans, such as conventional loans (meaning those that use Fannie Mae guidelines), they can be more expensive to own.

What makes FHA loans costly to own are one-time fees and monthly premiums charged that are related to mortgage insurance.

On the conventional mortgage side, the higher your credit score, the more favorable terms you can expect. You can, in fact, get a mortgage with Fannie Mae with a credit score of 620, and they could require a down payment of 25%.

Plus, Fannie Mae puts a premium on the interest rates of borrowers with lower credit scores. Even someone with a credit score of 680 would have significantly better financing options than someone with a lower score. It really does pay to have the best credit you can before applying for a mortgage.

I am here to help you find the best mortgage program for you based on your credit profile and down payment. I am just a phone call or email away.