May 8th, 2014 10:27 AM by Kathy Delbridge
The Magic Number - What Does Your Credit Score Need to Be to Qualify for a Home Loan
Over the course of a lifetime, financial development can lead to some wonderful opportunities. A person's financial development and state of affairs is something that is particularly important when it comes to taking out a bank loan to further progress in life, and the largest loan most people will require is a mortgage for a home purchase.
Since the process of getting approved for a mortgage is heavily dependent on credit history and that three-digit credit score that reflects reliability as a borrower, you should always put forth practices to keep that number healthy and growing.
However, how much importance does a credit score hold? Does that magic, three-digit number need to be above 800 in order to get approved for a mortgage? Answer is absolutely not.
The FICO Score: The Magic Number That Counts
When you apply for a mortgage, you will have to provide certain information so they we may pull your credit report. Your credit score/history and ability to verify your income are the TWO most important factors in obtaining a home loan.
Fair, Isaac and Company is the scorekeeper of your FICO score, which ranges from 300 to 850, 850 being the highest of all scores, and 300 being the lowest.
The 600 Range: Fair And Good Credit Mortgage Options
If your credit score isn't perfect , you need not worry too much. There are many options available for those with credit scores above 620.
With a "fair" and "good" credit rating falling between 620 and 719, there are options available to get approved for a mortgage well under the perfect 800 mark. An FHA loan is a type of mortgage loan that is insured by the US Federal Housing Administration, offering an option with more flexible qualification measures. For homebuyers with a credit score above 620, this is a viable and common option.
720 To Perfect: Under 800 And Still In Great Shape
The median credit score in the United States is 723, and anything above 720 is placed with the marker of "excellent credit." Therefore, just because you may range just slightly above 720, which may feel miles away from a perfect 800, you are in GREAT shape when it comes to getting approved for a mortgage ( provided you have a verifiable income) .
Keeping an eye on your credit rating and understanding the measures that are used in determining your credit score will certainly help you maintain a good score. Of course, speaking with a mortgage professional ( like me) and receiving expert advice is always recommended.
For specified information on your particular situation, please contact me at 678-773-0651 or Kathy@KathyDelbridge.com to discuss your options for receiving a mortgage loan.
Also, you will find VALUABLE information regarding credit scores by visiting the following page that is found here on my website.