What Credit Score is Needed to Buy a House

What credit score is needed to buy a house?


Mortgage World Home Loans of New Jersey is a licensed residential mortgage broker and will match you with the lender that will approve your FHA loan down to a 500 credit score.

A strong FHA is critical to the recovery of the housing market and our economy at large. FHA continuing to support the nation’s housing market recovery.

After the financial crisis of 2008 qualifying for a mortgage became a lot harder. If not for FHA many borrowers would not qualify for a mortgage. What makes FHA different than a conventional loan is the FHA will approve you and give a better interest rate with a lower down payment even if you have a low credit score.

After 2008 all the major banks raised their standards for approving FHA loans. Because the banks make the rules for loans they will approve, they may require a minimum credit score of 640 for their loans. These guidelines are the bank's guidelines. What this means is, all the major banks including Wells Fargo, Bank of America, Chase, Citigroup, etc. banks make the rules for loans they will approve.

  • HUD homes for sale $100 down
  • What credit score is needed to buy a house
  • Credit score needed to buy a house in Florida
  • Credit score needed to buy a house in Florida

What credit score is needed to buy a house

FHA minimum credit score is 500. New FHA policy requires a minimum credit of 500 to buy a house. In the old days FHA did not require any credit score. These changes went in to effect in 2010.

To buy a home you will need a minimum credit score of 500.

Borrowers with credit score above 580 require a 3.5% down payment. The down payment funds can be the borrowers own funds or a gift from a family member and up to a 6% seller's concession is allowed.

FHA does not have a minimum trade line requirement.

FHA allows borrowers with no credit score to qualify for an FHA loan.

If your credit score is below 580 new FHA changes require a 10% down payment. The down payment funds can be the borrowers own funds or a gift from a family member and up to a 6% seller's concession is allowed.

New FHA collection account guidelines

FHA does not require collection accounts to be paid off as a condition of mortgage approval. However, FHA does recognize that collection efforts by the creditor for unpaid collections could affect the borrower’s ability to repay the mortgage.

  • If evidence of a payment arrangement is not available, the lender must calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower’s debt-to-income ratio.

Bankruptcy, Foreclosure and Short Sale

Bankruptcy - At least two years must have elapsed since the discharge date of the borrower and / or spouse's Chapter 7 Bankruptcy, according to FHA guidelines.

Foreclosure - Foreclosure must have been resolved for at least 3 years with no late payments since the date of resolution.

Short Sale - FHA guidelines lets you qualify for a loan after three years from a short sale. FHA guidelines requires three year past from the date of sale of the property. If at the time of short sale your mortgage payments were not late for the previous 12 months there is no waiting period.


What credit score is needed to buy a house

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Minimum credit score needed

to buy a house


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FHA loans

Requires a minimum credit score of 500 to buy a house

minimum credit score 500


VA loans

Requires a minimum credit score of 500 to buy a home

Minimum credit score 500


HOMEPATH

Requires a minimum credit score of 620 to buy a home

Minimum credit score 620


Fannie Mae

Requires a minimum credit score of 620 to buy a home

Minimum credit score 620


Freddie Mac

Requires a minimum credit score of 620 to buy a home

Minimum credit score 620


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