What Credit Score is Needed to Buy a House?
If you’re interested in buying a house, but are concerned about the health of your credit or believe you have a low credit score, don’t be discouraged.
Like all loans, your credit score influences the interest rate and down payment. Different loan programs require different minimum credit score requirements.
How your credit score affects your home loan
A credit score can often range from 300 to 850. There isn’t an exact number that is the minimum credit score to buy a house. It depends on numerous factors, but in general, a score of at least 620 makes it likely that a mortgage loan program will be available to you. Mortgage loans for lower credit scores may also be available from time to time, but usually require a larger down payment and/or you might receive a higher interest rate on your mortgage, which can impact the amount of loan you can afford.
Can I buy a house with my credit?
If you’re asking yourself that question, we recommend talking with a BBVA Mortgage Loan Officer. They can review your credit score, and if needed suggest ways to improve it.
Here are some steps to take if you’re not sure about your credit score for mortgage qualification:
Review your credit history with your lender
Explain the situation as thoroughly as possible, highlighting areas of financial responsibility such as a history of on-time rent or utility payments, cash reserves in the bank, and other positive financial accomplishments. This information is helpful to lenders in identifying compensating factors.
Ask what you can do to qualify for a lower rate long term
Due to the increased risk involved in extending the home loan, those with a poor credit history may find themselves with higher mortgage payments at first. However, you can continue to find ways to make improvements to your credit score by paying bills on time and saving money. As your credit improves, you can always look into refinancing the loan with a more favorable rate.
Look for lending programs designed specifically for those with lower credit
BBVA offers a wide variety of mortgage loans, including our HOME (Home Ownership Made Easy) program. This community home loan program offers lower credit score requirements and other benefits for people with challenged credit.
Want to discuss your mortgage options based on your current credit score? Contact a BBVA Mortgage Specialist today!
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