What Credit Score Do I Need To Buy A Home?

Dated: March 29 2019

Views: 129

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

·       16% Very Poor (300-579)

·       18% Fair (580-669)

·       21% Good (670-739)

·       25% Very Good (740-799)

·       20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores,”

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:hat Credit Score Do You Need To Buy A House? | Keeping Current MattersAs you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time.

hat Credit Score Do You Need To Buy A House? | Keeping Current Matters

Carl Ballard is a Denver Realtor and a Certified Negotiation Expert specializing in working with home buyers and sellers within the Denver Metro Area .  Carl utilizes the power of internet marketing to provide you with excellent property exposure as well as up to the minute accurate and current information synced with the Colorado MLS system.  Carl holds the highest standard of work ethic and will ensure that you are taken care of from the first day of transaction to the closing table.  Working with Exit Realty Denver Tech Center for over 12 years Carl and his team The Ballard Group are committed to customer service and helping you the consumer with your listing and purchase needs. Our Team at The BALLARD GROUP considers it a privilege to work with all of our clients. 

 Your Home - Our Mission.

The Ballard Group - 303-916-2900.

www.carlsellsdenverhomes.com

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Carl Ballard

The Ballard Group has provided Residential Real Estate Services in the Denver Metro Area for 20+ years. Our clients are getting the service and experience of TWO REALTORS! Carl, a Denver native with ....

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