What’s a good credit score for Frist time homebuyers?
- Credit scores are one factor mortgage lenders consider when evaluating you for a loan. Lenders also use your credit scores to help set your interest rate and other loan terms.
- Most conventional mortgages require first-time homebuyers to have a minimum credit score of 620 for approval.
- First-time homebuyers whose credit scores don’t hit the standard minimum may still be able to qualify for a mortgage through FHA, VA or USDA programs.
The stakes are high for first-time homebuyers applying for a mortgage. It’s only natural to wonder how your credit scores will impact your mortgage application.
Here’s what to know about minimum credit score requirements as a first-time homebuyer.
How do my credit scores affect my chances of getting a home loan?
Credit scores are three-digit numbers, typically between 300 and 850, that reflect your past behavior as a borrower. They are designed to indicate your creditworthiness, or the likelihood you will pay your bills on time.
Mortgage lenders consider credit scores as one factor when evaluating you for a loan. Along with other factors, such as your income, your credit scores can also affect the amount of money you qualify for.
There’s no magic number that guarantees you’ll be approved for a mortgage. But, generally speaking, higher credit scores increase your chances of securing a loan.
Once you’re approved for a mortgage, your lender uses your credit scores to help set your interest rate and other loan terms. Generally, lenders offer the lowest interest rates and best terms to the lowest-risk borrowers.
Is there a minimum credit score for first-time homebuyers?
Credit score requirements vary from lender to lender. However, for most conventional mortgages, homebuyers need a minimum credit score of 620 for approval. If your score is below this benchmark, you are unlikely to qualify for a conventional loan.
— Ask me! Approval Guy
