• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Rachel Gontkovic - Long & Foster Annapolis

Live the Annapolis Lifestyle

  • Home
  • About Us
  • Listings
  • Testimonials
  • Resources
  • Blog
  • Contact
  • Search Homes
  • What Is Your Home Worth?

What Credit Score Do You Need for a Mortgage?

March 30, 2021 by Rachel Gontkovic

According to data from the most recent Origination Insight Report by Ellie Mae, the average FICO® score on closed loans reached 753 in February. Lending standards have tightened recently, and many are concerned over whether or not their credit score is strong enough. Stricter lending standards could be a challenge, but some buyers may be surprised by the options that are still available for lower credit scores.

The fact that the average American has seen their credit score go up in recent years is a great sign of financial health. As someone’s score rises, they’re building toward a stronger financial future. As more Americans with strong credit enter the housing market, we see a natural increase in the FICO® score distribution of closed loans.

If your credit score is below 750, it’s easy to fear that you may not be able to qualify for a mortgage. However, that’s not always the case. While the majority of borrowers right now do have a score above 750, there’s more to qualifying for a mortgage than just the credit score. There are options that may allow people with lower credit scores to buy their dream home. Here’s what Experian says:

  • Federal Housing Administration (FHA) loans: “With a 3.5% down payment, homebuyers may be able to get an FHA loan with a 580 credit score or higher. If you can manage a 10% down payment, though, that minimum goes as low as 500.”
  • Conventional loans: “The most popular loan type typically comes with a 620 minimum credit score.”
  • Department of Agriculture (USDA) loans: “In general, lenders require a minimum credit score of 640 for a USDA loan, though some may go as low as 580.”
  • Department of Veterans Affairs (VA) loans: “VA loans don’t technically have a minimum credit score, but lenders will typically require between 580 and 620.”

There’s no doubt a higher credit score will give you more options and better mortgage terms, especially when lending is tight. I can talk to you about steps you can take to improve your credit score so you’re in the best position possible. Don’t rule yourself out if your score is less than perfect – today’s market is still full of opportunity.

Bottom Line

Don’t let assumptions about your credit score put a premature end to your homeownership goals. Contact me today to discuss the options that are best for you.

 

Cover photo courtesy Tierra Mallorca via UnSplash

Filed Under: Ask the Realtor, First Time Homebuyers, For Buyers Tagged With: annapolis realtor, buying a home, financing, first home, home buying tips, Mortgage, Rachel Frenstos

More Posts

Breaking Down Renting Vs. Owning

Liens That Can Stop a Sale

Want To Buy a Home? Now May Be the Time.

Maryland Real Estate Stats

Primary Sidebar

Sign up for my Newsletter

Annapolis Lifestyle

Waterfront homes in Annapolis Maryland

The Blog

Rachel Frentsos writing a blog article

Recent Posts

  • Balancing Your Wants and Needs as a Homebuyer This Spring
  • What Buyer Activity Tells Us About the Housing Market
  • Could a Multigenerational Home Be the Right Fit for You?
  • 2 Things Sellers Need To Know This Spring
  • Interview with Welcome Home!

Archives

  • March 2023
  • February 2023
  • January 2023
  • December 2022
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • February 2021
  • January 2021
  • December 2020
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • March 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • September 2018
  • August 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • November 2017

Categories

  • Annapolis Lifestyle
  • Ask the Realtor
  • First Time Homebuyers
  • For Buyers
  • For Seller
  • Holiday
  • Home Improvement
  • Home Maintenance
  • Moving Forward with Rachel
  • Resources
  • Uncategorized
March 2023
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
2728293031  
« Feb    

Footer

Rachel FrentsosRachel Gontkovic (Frentsos)
Realtor

Connect with Me on:

  • Facebook
  • Instagram
  • LinkedIn
Sign up for my Newsletter

Send Rachel a Message

Copyright © 2023 Rachel Gontkovic (Frentsos), Annapolis Fine Homes - All Rights Reserved

Website images by JLowe Photos unless otherwise indicated.

Site design and hosting by Fischer IT Solutions for Business By Barnhill