Looking to buy a home? It’s likely that you will need to have a solid financial foundation including a good credit score to qualify for the loan necessary for this major purchase, a new house! Having a low credit score can have an impact on your ability to buy a home.
If you plan to buy with credit, you’re going to need to secure a mortgage from a bank and they will not loan money to just anyone especially someone who has history of not paying their debts. If you’re approved with a low score the monthly mortgage & interest rates could be higher, but it is more likely you won’t be able to secure a mortgage at all. With a high credit score you will be able to secure better interest rates and lower down payments!
Depending on the type of loan you’re applying for the requirements differ. Out of all the mortgages FHA loans have the lowest credit requirements of at least 500. Real estate mortgage requires a bit higher credit score of 620. It is important for your credit score to be at least 600 if you are looking to purchase a home, the higher your score the more likely you are to get approved!
TIP: To avoid high interest rates your score should be above 700.