MY BLOG - Working For You Every Step of the Way!

head_left_image

What FICO® Score Do You Need to Qualify for a Mortgage?

What FICO® Score Do You Need to Qualify for a Mortgage?

What FICO® Score Do You Need to Qualify for a Mortgage? | MyKCM

While a recent announcement from CNBC shares that the average national FICO® score has reached an all-time high of 706, the good news for potential buyers is that you don’t need a score that high to qualify for a mortgage. Let’s unpack the credit score myth so you can to become a homeowner sooner than you may think.

With today’s low interest rates, many believe now is a great time to buy – and rightfully so! Fannie Mae recently noted that 58% of Americans surveyed say it is a good time to buy. Similarly, the Q3 2019 HOME Survey by the National Association of Realtors said 63% of people believe now is a good time to buy a home. Unfortunately, fear and misinformation often hold qualified and motivated buyers back from taking the leap into homeownership.

According to the same CNBC article,

“For the first time, the average national credit score has reached 706, according to FICO®, the developer of one of the most commonly used scores by lenders.”

This is great news, as it means Americans are improving their credit scores and building toward a stronger financial future, especially after the market tumbled during the previous decade. With today’s strong economy and increasing wages, many Americans have had the opportunity to improve their credit over the past few years, driving this national average up.

Since Americans with stronger credit are now entering the housing market, we are seeing an increase in the FICO® Score Distribution of Closed Loans (see graph below):What FICO® Score Do You Need to Qualify for a Mortgage? | MyKCMBut hang on – don’t forget that this does not mean you need a FICO® score over 700 to qualify for a mortgage. Here’s what Experian, the global leader in consumer and business credit reporting, says:

FHA Loan: “FHA loans are ideal for those who have less-than-perfect credit and may not be able to qualify for a conventional mortgage loan. The size of your required down payment for an FHA loan depends on the state of your credit score: If your credit score is between 500 and 579, you must put 10% down. If your credit score is 580 or above, you can put as little as 3.5% down (but you can put down more if you want to).”

Conventional Loan: “It's possible to get approved for a conforming conventional loan with a credit score as low as 620, although some lenders may look for a score of 660 or better.”

USDA Loan“While the USDA doesn't have a set credit score requirementmost lenders offering USDA-guaranteed mortgages require a score of at least 640.”

VA Loan: “As with income levels, lenders set their own minimum credit requirements for VA loan borrowers. Lenders are likely to check credit scores as part of their screening process, and most will set a minimum score, or cutoff, that loan applicants must exceed to be considered.”

Bottom Line

As you can see, plenty of loans are granted to buyers with a FICO® score that is lower than the national average. If you’d like to understand the next steps to take when determining your credit score, let’s get together so you can learn more.

My AR banner 2017

Barbara Michaluk, Realtor

Phone 240-506-2434

Email: michaluk@verizon.net  /  Web: BarbaraSellsMDhomes.com

Authorized Leisure World Specialist / Senior Real Estate Specialist /
Internet Marketing Specialist / Certified E-Pro / Certified Staging Agent

Weichert Realtors / 3816 International Dr / Silver Spring, MD 20906

Authorized Leisure World Specialist     Barbara Michaluk Graduate Internet Marketing Specialist Barbara Michaluk Senior Real Estate Specialist   

Comment balloon 1 commentBarbara Michaluk • October 10 2019 08:03PM
What FICO® Score Do You Need to Qualify for a Mortgage?
share
What FICO® Score Do You Need to Qualify for a Mortgage? While a recent announcement from CNBC shares that the average national FICO® score has reached an all-time high of 706, the good news for potential buyers is that you don’t need a score… more
When buying a home in Leisure World, stay calm during the negotiations
share
When buying a home in Leisure World, stay calm during the negotiations Ready to downsize to a home in Leisure World? Although you might have already located your ideal residence, you may need to negotiate with a home seller. By doing so, both you… more
Condo for sale 3005 S Leisure World Blvd #803 in Leisure World of MD
share
Condo for Sale 3005 S Leisure World Blvd #803 in Leisure World of MD List Price $307, 000 Beautiful 1, 315 sq. ft. condo in Turnberry Courts hi-rise building. Featuring 2 bedrooms and 2 bathrooms. Spacious living room with fireplace. Separate dining… more
Leisure World condo for sale 3330 N Leisure World Blvd #431
share
Leisure World condo for sale 3330 N Leisure World Blvd #431 Silver Spring, MD 20906 List price $324, 900 more
Leisure World MD condo for sale 3330 N Leisure World Blvd #431
share
Leisure World MD condo for sale 3330 N Leisure World Blvd #431 Silver Spring, MD 20906 List price $324, 900 For more details go to: www. BarbaraSellsMDhomes. com Contact Barbara Michaluk / Weichert Realtors Authorized Leisure World Specialist to… more
Condo for Sale 3210 N. Leisure World Blvd. #505, Silver Spring, MD
share
Condo for Sale 3210 N. Leisure World Blvd. #505, Silver Spring, MD 20906 in 55+ Leisure World of Maryland List price $360, 000 55+ LEISURE WORLD Condo - All new paint & carpet throughout this lovely 3 bedroom, 2 bath condo with indoor garage… more
Buying a Home in Leisure World of Maryland This Year?
share
Buying a Home in Leisure World of Maryland This Year? This Should Be Your 1st Step! In many markets across the country, the number of buyers searching for their dream homes outnumbers the number of homes for sale. This has led to a competitive… more
New Price For Sale 3510 Fitzhugh Ln. in Leisure World MD
share
New Price For Sale 3510 Fitzhugh Ln. in Leisure World MD Silver Spring, MD 20906 New List Price $329, 000 One-level patio/rambler style home with 1, 210 sf 2 bedrooms / 2 bathrooms One-car attached garage New neutral carpet and paint Entry foyer… more
Leisure World MD for sale 3510 Fitzhugh Ln. Silver Spring MD 20906
share
Leisure World MD for Sale 3510 Fitzhugh Ln. Silver Spring MD 20906 Price Just Reduced to $329, 000 Reduced List Price $329, 000 One-level patio/rambler style home with 1, 210 sf 2 bedrooms / 2 bathrooms One-car attached garage New neutral carpet… more
Leisure World Condo sale 3330 Leisure World Blvd #723 Silver Spring
share
Leisure World Condo sale 3330 Leisure World Blvd #723 Silver Spring MD 20906 List Price $195, 000 Spacious condo with 1, 220 sq. ft. Featuring 2 bedrooms and 2 bathrooms. Light and bright living room and separate dining room. Glass-enclosed sunroom… more