What Credit Score Do I Need To Purchase A Home?

    Ready to learn what your credit score needs to be in order to purchase a home? Keep reading below!

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    “What credit score do I need to be able to purchase a home?” I actually get this question at least twice a day!

    Now credit score is certainly not the only thing lenders look at when determining your ability to purchase, however it certainly does play a huge role when determining your interest rate.

    Now credit score is certainly not the only thing lenders look at when determining your ability to purchase, however it certainly does play a huge role when determining your interest rate.

    Typically a score of 660 or higher will get you a decent rate, however we are seeing that you can qualify for some of the loan programs out there with a credit score as low as 500.

    Some other things lenders look at in determining your ability to purchase include your income level, amount of money in your savings account.

    Preparation

    When you are ready to begin the process of applying for a mortgage loan, you will need to prepare your pay stubs, your W2’s, your bank statements, and the last two years tax returns. You will also need a credit report, which your lender will run for you.

    All of these items will be looked at by a lender in order to determine your affordability of a mortgage payment.

    Factors That Determine Your Credit Score

    Some factors that affect your credit score will be your payment history, any outstanding balances that you  may have, any new lines of credit you have open, the length of credit history, and the types of credit that you actually use.

    Getting with a good lender is very important to see where your credit stands, and also what steps you can take to improve your  improve your credit rate. If you are looking for a lender that can consult with you and coach you on the actual credit score and how it affects lending, give us a call at 504-509-4771 and we can connect you with a top notch lender in our area.

    FHA Loans

    FHA Loans are a lot less stringent than conventional lending. We are able to look at things like bankruptcies or foreclosures on your credit history  and still be able to get you into a home at 3.5% down with an FHA loan. Also, with an FHA loan you can have a credit score as low as 580 and still qualify for a down payment of 3.5% as well.

    If you have a credit score of a 500 – 580, you would be looking at programs within FHA that would require a down payment of at least 10%.

    Some other interesting programs that are available right now are some no money down programs such as Rural Development, St. Tammany Soft Second, St. Bernard Soft Second, Jefferson Parish Grant Program, New Orleans Parish Grant Program. These are all great programs to help buyers get into a home with no money down, and some of these programs take credit scores as low as a 580 to qualify.

    If you are looking for more information about these loan programs, or different routes you need to take to improve your credit, give us a call at 504-509-4771 today or complete the contact form below so that we can put you in the right direction.

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