Wednesday, February 24, 2021 / by Flr Team
Do you know what type of credit score you need to purchase a home? Manypeople think it has to be flawless, but that’s actually not the case. Scores can be in the 500s but the higher the credit score, the more rewarding it is. You can get a lower interest rate which in the long run, is very beneficial. But if you do have a lower score, you aren’t completely out of the game.
For the majority of loans, you need a minimum score of 620 to qualify. But don’t let that hold you back.There are many different loans that you can qualify for based on your score. If you are not aware of them, here are some of the common ones:
Conventional Loan: 620 Score
Is not guaranteed or insured by the federal government. Most conventional mortgages are “conforming,” which simply means that they meet the requirements to be sold to Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac are government-sponsored enterprises that purchase mortgages from lenders and sell them to investors. This frees up lenders’ funds so they can get more qualified buyers into homes.
FHA Loan: 500 Score
The FHA, or Federal Housing Administration, provides mortgage insurance on loans made by FHA-approved lenders. FHA insures these loans on single family and multi-family homes in the United States and its territories. It is the largest insurer of residential mortgages in the world, insuring tens of millions of properties since 1934 when it was created.
VA Loan: 640 Score
VA helps Service-members, Veterans, and eligible surviving spouses become homeowners. They provide a home loan guarantee benefit and other housing-related programs to help people buy, build, repair, retain, or adapt a home for their own personal occupancy.
If you think your score isn’t high enough- whether it be from bad credit or no credit- there are ways in which you can help improve it. Sitting down with a lender is a great place to start. They can discuss ways in which you can improve your score and set up a plan for you to get the score you want for the loan you need. You can also get a co-signer to contribute to your loan, or meet with a financial advisor to set you up for success.
As a REALTOR, we want to ensure you get the property you love, that is affordable for you. We are here to guide you through the biggest investment of your life. If you are interested in discussing your credit score or what loan you are approved for, please feel free to reach out to our team of professionals. They can help connect you to the right lenders and create a plan for you to achieve your goals.
Contact us today to chat!
Florida Lifestyle Realty