If you’re shopping for a home in Seattle, you’ve probably been keeping good track of your finances to know exactly where you stand. However, you may still have questions, and one of the most common is, “What credit score do I need to buy a house?” The short answer is that it depends on how you’re financing the home, but here are a few guidelines to get a better idea of what lenders are looking for.

If you want an ideal loan situation, with the lowest mortgage rate, you are going to want a credit score of 760 or higher. Of course, because credit is affected by many factors, it’s unlikely that the average homeowner is in that position. For most mortgage loans, a score of 620 or higher will suffice. In addition to most conventional loans, this is the typical credit score for a VA loan as well.

If your credit doesn’t quite cross the 620 threshold, you may still qualify for an FHA loan. These loans have a minimum credit requirement of 580. There are some unlikely situations where an FHA loan will be issued to individuals with credit as low as 500, but these loans are uncommon and usually require down payments of up to 10% to protect the lender.

Remember, you can request one free credit report from each of the Big Three—Equifax, Experian, and TransUnion—once per year, so take advantage of this service to get a handle on your credit situation, and make necessary adjustments in order to qualify for the loan that’s right for you.

For specific credit score requirements and loan rate information speak with your lender of choice. Its okay to reach out to a loan originator long before you ever officially apply for a loan. If your financial situation is less than ideal they can make suggestions on how to improve your credit score. Far too often potential borrow are afraid to talk to a lender. Just remember they don't get paid unless they can help you. They want to loan you money. 

If you don’t have a lender of choice I’d be happy to refer you to a few great, local Seattle are lenders. Just ask. 

 

David Warren - Metropolist

 

425-760-8282 / david@metropolistgroup.com