A good credit score is one of the most important factors when you’re considering buying your own house. The minimum score you’ll need greatly depends on what type of mortgage loan you’re applying for and who your lender is.
Even though it’s sometimes possible to get your mortgage loan approved with a considerably low credit score, you most likely won’t receive an affordable interest rate in that case, prolonging your payoff duration while also not leaving you with much money on the side for other expenses.
If you’re interested in finding out more about the credit score you need to get your own house, keep reading.
The Minimum Credit Score To Get A Mortgage
There are several different types of mortgage loans, and each of them has a specific minimum requirement. Some lenders may even follow a stricter criterion and take several other factors into consideration, apart from their credit scores.
Here are some of the main types of mortgage loans and their respective minimum score requirements.
Conventional Loans: These are loans that are not issued by a government agency, but they do conform to standards set by government-sponsored entities. These types of loans usually have a minimum credit requirement of 620.
Jumbo Loans: These typically carry much higher loan amounts compared to conventional loans. This means that there is a greater risk involved, making the required credit score requirements as high as 700.
USDA Loans: These loans are insured by the U.S. Department of Agriculture and require a minimum credit requirement of 580 for approval.
Is It Possible To Get A Mortgage With A Low Credit Score?
Contrary to popular opinion, it is possible to get approved for a mortgage with a low credit score, but even when that happens, it could lead to high interest rates, which might cost you thousands of dollars.
If you’re planning on getting your own home but have a bad credit score, here are a couple of useful tips that can help.
- Negotiate a larger down payment and make sure you have good cash reserves after that.
- Actively try to pay off your debts. This will lead to a decrease in your DTI.
- Try and get someone with a good credit score to apply as a cosigner.
Another useful tip if you’re looking to get a house in Spartanburg County, SC, is to get in touch with a credit consulting company like Masters Credit Consultants today!
Our services include specialized credit counseling and credit restoration services to ensure that you get to live life on your term. For further details, call us at 1-844-620-8796 or email at email@example.com.