credit score and home loans?

my husband and i are trying to buy or first home, our credit score has been rather low for some time, we have done some repairing to it for the last several years, one loan company said or credit score needed to be 620 or higher in order for them to help us, we fall short of that just by a few points, does anyone know if this is a standard with most loan companies or is it possible to get a home loan with a mid to average credit score?


in a perfect world 620 and above is wonderful, in todays world however 620 is the average, forgive me for mis speaking, in your opinion. we were dealing with V A and so i just wondered if they held their standards higher than some, my husband and I have worked a long time to get our score where it is. his first wife left him 49 thousand dollars in credit card debt. its been a long struggle.

7 Answers

  • Tom K
    Lv 7
    8 years ago
    Favorite Answer

    Found the following:

    "The 620 minimum is for all mortgages: conforming, FHA, VA and USDA. This means that there is no longer a mortgage option for these higher credit risk borrowers (although the current market begs the question should they ever have)."

    So keep working on your credit score. Monitor all three credit bureaus. And remember, too, that your credit score doesn't only determine whether you can get a loan, but also the interest rate you'll pay when you do get a loan.

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  • I don' t know where you get the idea that 620 is "average" let alone "wonderful." It's sub-prime and borders on poor. A FICO score below 620 cuts you out of the mortgage market entirely. Those risky loans that contributed to the economic melt-down are a thing of the past.

    Anything below 725 or so is going to result in higher interest rates and/or larger down payment requirements for a conventional mortgage. You can go as low as 620 on an FHA or VA loan but you still must meet very strict housing cost to income and total debt to income ratios and have enough income to swing the payments. I've been turned down in the past for missing one of those ratios by less than half a percentage point.

    I know what it's like being in the potty credit wise with a FICO in the mid 500 range and debt up the wazoo. It takes time to dig out. The only thing that you can repair quickly is getting erroneous derogatory information removed. Legitimate derogatory information stays for 7 to 10 years and nothing but time will lessen the impact. The older that derogatory information is, the less impact it will have. It took me 10 years to go from 550 with $50,000 in credit card debt to 750 and no debt. That was 20 years ago and I've kept it between 750 and 800 since then and have kept total unsecured debt to less than 5% of my gross annual income and total debt service (including mortgage) to less than 25% of my gross income.

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  • 8 years ago

    Let's be honest here first- Any score below 620 is considered low. You do not have 'average' credit if it's below 620.

    If you are really ready to buy a home, you should have:

    - 10-20% of the cost of the home ready in cash for your downpayment

    - Credit score of over 700 (prefer 740)

    If you get a home loan when your credit score is so low, you'll be charge higher interest and get bad terms in your mortgage. It's just not worth buying a home sooner when you could just wait a little longer and buy a home when you are really ready. It just doesn't seem like you are ready for the responsibility of a home loan at this time in your life.

    EDIT: Sorry hunny, there's no opinions here. Below 620 is NOT average. Find one legitimate source that says 619 or lower is good and maybe I'll believe you. You are just grasping at straws to think you are average when that's just not true.

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  • 8 years ago

    620 is the bare minimum needed to buy a house these days. As noted above, your interest rate will be higher than someone with excellent credit (in some cases a point or more higher). Most lenders want 640 or more and of course you need 700 or more to get the best rates.

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  • 8 years ago

    620 is wonderful? Are you serious? That is pretty piss poor credit. 800 is wonderful.

    There is no way 620 is average.

    You simply need to bring your credit up. Personally I think you should wait, until you have more like 700 and a firm hand on living within your means.

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  • 8 years ago

    YES, and many want higher scores

    The loan approval depends on the WHOLE package of you two: credit score, sufficient down payment, adequate income, low debtload, job stability, etc.

    The MORE money you put down, the more likely you are to obtain loan approval. . . .the LESS you put down, the MORE you pay for the house over time, 3-9 times its purchase price

    IMHO you should wait 6 months, saving for down payment and rebuilding your credit rating as it is below the bare minimum threshhold, and not yet "average".

    Source(s): real estate investor
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  • Anonymous
    8 years ago

    A 620 is the minimum for a conventional, conforming mortgage, 580 is the minimum for FHA financing with 3.5% down and 500 is the minimum with 10% down. I'm sure people will give me a thumbs down because they have no idea what the actual guidelines are but I assure you that my information is correct. See HUD:

    VA mortgages have no minimum credit score requirement at all so don't be misled. What you need is a licensed expert to help you and a mortgage broker instead of a bank that can find the financing that does exist. See:

    A good broker will first show you how to raise your score to qualify for preferred financing and if that doesn't work, will properly advise you on how to proceed; go to http://FHAR.Net

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