So many people assume that buying a house depends on their credit score. That is partly true. Depends on which program you are qualifying for, your income to debt ratio, and your employment stability. Speaking to a knowledgeable lender is key. I am happy to share some preferred lenders contact information to get you started. I am an independent contractor/ REALTOR; so please feel free to use any bank of your choice. When buying your house you are free to use any bank and realtor of your choice. Working with myself or my team our buyer representation is free. Get comparisons and feel at ease moving along with your home purchase. If you choose to use our services you will be supported from beginning to end. Let's walk the path to home buying together. #mrssarealtygroup#wehonorrebates#buyerssupport#sanantonio
What FICO® Score Do You Need to Qualify for a Mortgage?
While a recent announcement from CNBC shares that the average national FICO® score has reached an all-time high of 706, the good news for potential buyers is that you don’t need a score that high to qualify for a mortgage. Let’s unpack the credit score myth so you can to become a homeowner sooner than you may think.
With today’s low interest rates, many believe now is a great time to buy – and rightfully so! Fannie Mae recently noted that 58% of Americans surveyed say it is a good time to buy. Similarly, the Q3 2019 HOME Survey by the National Association of Realtors said 63% of people believe now is a good time to buy a home. Unfortunately, fear and misinformation often hold qualified and motivated buyers back from taking the leap into homeownership.
“For the first time, the average national credit score has reached 706, according to FICO®, the developer of one of the most commonly used scores by lenders.”
This is great news, as it means Americans are improving their credit scores and building toward a stronger financial future, especially after the market tumbled during the previous decade. With today’s strong economy and increasing wages, many Americans have had the opportunity to improve their credit over the past few years, driving this national average up.
Since Americans with stronger credit are now entering the housing market, we are seeing an increase in the FICO® Score Distribution of Closed Loans (see graph below):But hang on – don’t forget that this does not mean you need a FICO® score over 700 to qualify for a mortgage. Here’s what Experian, the global leader in consumer and business credit reporting, says:
FHA Loan:“FHA loans are ideal for those who have less-than-perfect credit and may not be able to qualify for a conventional mortgage loan. The size of your required down payment for an FHA loan depends on the state of your credit score: If your credit score is between 500 and 579, you must put 10% down. If your credit score is 580 or above, you can put as little as 3.5% down (but you can put down more if you want to).”
Conventional Loan:“It's possible to get approved for a conforming conventional loan with a credit score as low as 620, although some lenders may look for a score of 660 or better.”
USDA Loan: “While the USDA doesn't have a set credit score requirement, most lenders offering USDA-guaranteed mortgages require a score of at least 640.”
VA Loan:“As with income levels, lenders set their own minimum credit requirements for VA loanborrowers. Lenders are likely to check credit scores as part of their screening process, and most will set a minimum score, or cutoff, that loan applicants must exceed to be considered.”
As you can see, plenty of loans are granted to buyers with a FICO® score that is lower than the national average. If you’d like to understand the next steps to take when determining your credit score, let’s get together so you can learn more.
Author:Michelle Mendez Phone: 210-287-3501 Dated: October 9th 2019 Views: 12 About Michelle: I have been a realtor with the San Antonio Board of Realty and Texas real estate commission since 20...
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I have been a realtor with the San Antonio Board of Realty and Texas real estate commission since 2012. I chose this field because my background in sales management. I believe in listening to my clients needs and delivering results in a timely manner. I receive my continuous education from Champions School of Real Estate to further my expertise. My next personal goal is to get my brokers license in 2019.
I really love helping my clients get from point A to Z. Purchasing and selling real estate is a big deal. This is my clients investment and I am here to help them make the best decisions possible. I have met a lot of great clients that are now friends for life. My goal is to not only be your agent but your entir e families agent.
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"Michelle is awesome i just recently purchased my home a few weeks ago , but last year she helped me sale my home! so i can honestly say i have been on both sides with her!! when i was selling my home Michelle made it as smooth as it could be because it is a very stressful situation if you ask me trying to empty half way because we were still living their keeping it clean for showings and having to leave while they were showing it, i also have two small kids so you can imagine but it wasn't to bad at the end i was worried i was not going to make the deadline and have my house empty and clean, Michelle had my house cleaned by a lady as her gift to me! not sure if that is a common thing to do or not but it was a life saver for me! and when i was purchasing my home she was very patient and helpful even worked on a Friday night till 9 pm with me i think we actually had a little fun as well. and every bump along the way she found a solution even getting my house prorated a week before signing which was very helpful for me!! she even recommended the mortgage company that qualified me for the house which is a challenge within itself lol ! truly an awesome realtor no matter the situation! "