Do you need good credit to buy a house?

I am 21 yrs old. Make a pretty good annual income. I have not so good credit. Looking to buy a house in the next year or so. Do I have to have good credit to buy a house? Or do it depend on the agency I go through?

10 Answers

  • 1 decade ago
    Favorite Answer

    The better your credit is, the better your interest rates and terms (prepayment req., reserve req., etc) will be. Lower interest rates will save you a ton of money in the long run!

    Best rates are for credit scores of 770 or higher. Really good rates at 720 and above. Decent rates at 680 and higher.

    A year is a good amount of time to get your credit in shape.

    Start by getting your credit reports from all 3 bureaus along with your credit scores. I like to use Cost is $14.95 but you need to remember to cancel your membership in the first 30 days or it becomes a monthly charge.

    Once you have your reports and scores you will know what you need to work on.

    Get old debts paid off. Reduce your balances on your credit cards or get your credit limits raised so you are only using a small percentage of your available credit.

    Don't close accounts unless you need to. The longer accounts are open in good standing, the better your credit score.

    Don't get any new credit accounts or make a large credit purchase (like a car) 6 months or less before your purchase. Buy a car afterward.

    Lenders want to see ongoing responsible use of credit over time. If you do not have at least three revolving (credit card) accounts, get them, use them once and pay them off.

    I think it's fantastic you are getting your long term plan together. Go fo it!

    Source(s): Experience
  • Anonymous
    1 decade ago

    Good credit is the foundation of mortgage lending. Look at it this way, if it was your money,who would you rather lend it to, someone who has a history of meeting their obligations in a timely manner or someone who doesn't?

    The best rates are offered on programs insured by the mortgage backed securities, Fannie Mae and Freddie Mac. These agencies set credit standards that borrowers must meet in order to qualify for financing. The rule of thumb is that the higher your credit score, the higher loan to value (less down payment) program s you may qualify for and the better the rate available.

    Other first time buyer programs like FHA may not be score driven but credit is still a consideration.

    Best advice? Spend the next couple of years getting your credit cleaned up so that you are correctly positioned to take full advantage of the opportunities available.

    Source(s): 20+ years as a direct mortgage lender
  • Anonymous
    1 decade ago

    Its better to have good credit, why? Lower interest rate. Lets say you score 569 your monthly house note would be about $1000 right? but lets say your score was 680 or above, then your house note may be $650. Which one would you rather pay. The going interest rate right now is 6% to 7% now depending on how much the house costs that 1% different maybe $5000, $10,000 so you see why its better to have good credit and also get pre-approved b4 you purchase as it gives you the the upper hand because you already will have the loan done

  • 1 decade ago

    Having a good credit rating helps get you a lower mortgage rate but it's not the only criteria mortgage lenders use when deciding to approve or disapprove a loan application.

    Each Bank and Mortgage Lender has there own guide for determining who they approve for a mortgage.

    Most lenders can pull your credit report in a matter of minutes over the phone just by asking a few simple questions. They should be able to tell you if your credit rating is good or bad.

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  • 1 decade ago

    You don't have to have good credit to buy a house BUT if your credit is not so good, it'll be harder for you to get a loan so that you can buy the house.

    Remember that the price you see on the house listing doesn't take into account closing costs and other miscellaneous expenses you'll have to pay.

    Good luck and happy house hunting!

  • Anonymous
    1 decade ago

    A good credit report is important when you want to buy a house, because you need to take out a mortgage. it depends on the lender if they are going to approve your loan or not.

  • 1 decade ago

    if you have bad credit you can still get a loan... but the rate will suck... pay down any credit card debt and make sure all acounts are current, if you have good income and some money to put down theirs plenty of lenders out their that will be happy to work with you... Dont let too manu pull your credit score, because inquiries deduct 2-5 points each... they mortage brokers will lie to you and say its not true,, but it is

  • 1 decade ago

    You can find out more if you go to a bank and they will run a credit report on you and then you will find out then if you can get a house or not. Good Luck!

  • 1 decade ago

    Let me ask where you are located....if you are in southern California, then I have a financial GURU who has fixed the credit of many of my home buyers!! Shoot me an email and I will give you his contact info!!! Even if you aren't here in California, perhaps he could recommend someone for you!!Best of luck to you!!

  • Anonymous
    3 years ago

    Well, it depends..

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