There are a quite a number of people nowadays whose credit scores are not as good as they once were. The downturn in the economy has brought a lot of financial changes for the wealthy, the middle class, and the low-income folks alike. At the same time, you may be thinking that this is the perfect time to get that dream house you have been looking for years. You may just be right, too. Interest rates on mortgages are at all-time lows, housing prices are falling, and some sellers really want to move their property despite the lack of significant profit. If this situation sounds like yours, you are probably wondering to yourself, what is the minimum credit score on a home mortgage loan?
The answer is that there really isn't one particular score that relates to every lender. Different lenders have different policies. However, most conventional lenders will not lend to someone who has a rating lower than around 610 or 620. And a score at those levels will not get top-notch rates and terms.
Now that we have seen the effects of a mortgage "crisis," even the FHA is making different requirements as far as a credit score goes. For decades, FHA loans have been available to people with less-than-stellar credit histories. In fact, that was the whole point of FHA loans. Most of the time, there was no such thing as a minimum credit score at all. The whole loan approval practice was based on individual circumstances rather than just numbers as numbers.
Now, even FHA has started with a minimum credit score. It was 500, which is truly low and still beneficial to many. Then, it was raised, and it has since been raised again. A lot of lenders look to the FHA as a guidepost and use the same minimum as the FHA does. Right now, that is 580.
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