What Credit Score is Needed to Buy a House?

Posted: 2/1/2021 | Read Time: 3min
Last Updated: 9/11/2021

Most first time homebuyers find themselves asking, “what credit score is needed to buy a house?”, which is a great question and great questions deserve great answers. First, it is important to understand what a credit score is.

By definition, a credit score is a number between 300-850 that represents a borrower’s creditworthiness. In regards to credit scores, higher is better. The higher the score the better a borrower looks to lenders. Here a few key factors that determine a credit score:

 

  • Credit history
  • Total amount of debt
  • Types of credit

 

Lenders use credit scores to better understand a borrower and evaluate the probability a borrower will repay their debts on time. With this information, it will be easier to understand what credit score is needed to buy a house.

 

What Credit Score is Needed to Buy a House?

As for many of the questions in real estate, it depends. It depends on what type of loan you are applying for. Here are three of the most common loan types and the credit score needed for each.

 

What Credit Score is Needed to Buy a House With a Conventional Loan?

To obtain a conventional loan, a borrower will typically need a credit score no lower than 620, along with a minimum of 3 percent for the down payment. Borrowers can obtain a loan with a lower credit score. However, it may require a larger down payment than the 3 percent associated with a conventional loan.

 

What Credit Score is Needed to Buy a House With an FHA Loan?

In the event you don’t have much money saved for a down payment and have a lower credit score, an Federal Housing Administration (FHA) loan may be right for you. To obtain an FHA loan, a borrower will need a credit score no lower than 580, along with a minimum of 3.5 percent down. Borrowers can obtain a loan with a lower credit score. However, if your credit score is between 500-579, a 10 percent down payment would be required.

 

What Credit Score is Needed to Buy a House With a VA Loan?

There is no industry-set minimum credit score when using a VA loan. Utilizing a government-backed VA loan can be a great option for you if you’re a veteran or qualified service member or spouse.

 

At Wyndham Capital, active-duty and veteran military members are very important to us. That’s why we are proud to offer VA loans with fast approvals, flexible guidelines, and a zero-down-payment-option.

 

So, what credit score do you need to buy a house? As you can tell, it depends. However, there are options available for a wide range of scores. Now that you know the answer to your question, “what is a good credit score to buy a house?” along with credit score requirements of a few common mortgage loans, let’s look at lending options.

 

Lending Options for Your Credit Score

Once you have decided to purchase a home, partnering with the right lender is very important and makes all the difference. Home lending is made easy when you can cut out the middleman and work directly with your mortgage lender. We encourage you to compare mortgage rates to help you help decide what mortgage lender is right for you and use our mortgage loan estimator so you know just how much your dream home will cost.

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Now you know what a credit score is and how it’s determined. You also know three loan types and their credit score requirements, answering your question, “what is a good credit score to buy a house? Now you can view our list of the most frequently asked mortgage questions to help you better understand the lending process.

 

At Wyndham Capital, a trusted mortgage company, we’re dedicated to making you feel right at home every step of the way. It would be our pleasure and privilege to work with you and provide you with all your home lending needs.

 


Maggie joined the Wyndham Capital Mortgage team in November 2020 as a Content Strategist. She has more than six years of content creation experience, which includes launching WBTV’s digital brand Queen City Weekend (now QC Life) and garnering more than 1.1 million page views across her articles. With a love of storytelling, she hopes to bring that passion to WCM and the many families it serves. She resides in Charlotte, North Carolina, and can often be found at a coffee shop, latte in hand.

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