What credit score do I need to buy a house?

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Credit. It can seem complicated and overwhelming, especially when you don’t know how it works or more importantly, why it matters. If you’re wondering what’s a good credit score to buy a home, don’t worry we’ve got the answer. With mortgage rates at historic lows, there’s no better time than now to become a homeowner. Quontic aims to simplify the process and give you the tools you need to understand the bigger picture.

What does my credit score mean?

Your credit score depicts your worthiness to borrow funds. Your credit score is calculated by three different credit bureaus, Equifax, Experian and TransUnion. Collectively, they assign you a particular score that can qualify you for bigger purchases like home loans and cars. Your number is a benchmark that establishes the credit score needed for a mortgage loan. The higher the score, the more qualified you are to potential creditors. Low credit scores aren’t world-ending, but can make your path to home ownership more constrained.

What goes into my credit report?

Your FICO score ranges between 300-850. It’s a combination of your payment history, length of credit history, the amount you owe, the type of accounts you have and your credit utilization ratio. All of these give creditors a better glimpse into your ability to sustain the financial undertaking of a big purchase like a home loan. You can find your personal credit score through your financial institution, websites like annualcreditreport.com or any other free credit report offerings.

Why do lenders use my credit score for a loan?

Quontic and other lenders use your credit score as an indicator for your future of the loan. A good credit score can give insight into determining your ability to repay on time. Your credit score is also a window into calculating what interest rate you qualify for. The higher your score, the better your rate! Higher interest rates cost you more money over the course of your loan, so it’s more advantageous to prove your creditworthiness before completing your mortgage application.

What's a good credit score to buy a house?

As a U.S. citizen, everyone is assigned a score based on the 300-850 scoring model. Your score will fall into the Bad (300- 579), Fair (580 -669), Good (670-739), Very Good (740-799). Excellent (800-850) range. The average credit score ranges between 600-750. The good news is you don’t have to be in the Excellent credit score range to buy a house. Lower credit scores don’t keep you out of the homeownership circle. For instance, to secure one of our most popular loan programs,  660 is the minimum credit score needed to buy a house.

How do I get a higher credit score to qualify for a home loan?

After researching your score, and you determine that it doesn’t reflect the credit score needed to buy a house, don’t worry! Bad credit isn’t permanent. There are so many options to boost your credit profile. Being mindful about paying credit card bills on time, checking your credit reports for errors, staying cognizant of your new credit accounts and paying down outstanding debt are great places to start. With hard work and smart decision making, you’ll see the credit score needed for a home loan.

What else besides credit scores, do lenders consider when buying a home?

Becoming a homebuyer isn’t based off your FICO score alone. Mortgage lenders look at the full scope of your application to justify the loan amount and type of mortgage you could potentially qualify for. Essentially, the lender wants to be confident you can afford your monthly payment, mortgage insurance and other costs associated with being a homeowner. Lenders will analyze the funds you have saved for your down payment, documentation like W2s and tax statements, debt-to-income ratio. Fortunately, Quontic offers unique programs that don’t require most or any of the barriers that other lenders may demand.

What home loans does Quontic offer that fit my credit score?

At Quontic, we offer a variety of loans that fit the needs of all kinds of borrowers. There are minimum credit score requirements based on the different loan programs you can qualify for. From conventional loans, FHA loans and VA loans to refinances – our team of experts are highly skilled to find the best option for you. As a CDFI, Quontic has standout lending programs that aren’t offered anywhere else.

What makes Quontic different from other mortgage lenders?

We’re the lender for those who have been denied, turned away, or need help qualifying based on their financial background. Whether you’re self-employed, a low-income family, or even a foreign national; we’re the bank for the borrowers who have felt unrepresented or unseen by other lenders. Even if your tax documents don’t tell your whole story, if you have the good credit score to buy a house, we can help. Speak to a mortgage specialist today to find out your eligibility, the type of loan you would need, and get started on your home buying journey.

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