Louisville, Ky Mortgage Lenders: Credit Scores FHA Loans Louisville Kentucky KHC

First Time Home Buyer Credit Score

What Credit Score do You Need to qualify for a FHA VA KHC Kentucky Mortgage Loui
sville Kentucky

What Credit Score do You Need to Buy a Home?

When it comes to mortgages and credit scores, there are two really important que
stions to ask:
â What credit score do I need to qualify for a mortgage?
â What credit score do I need to get the lowest interest rate on a mortgage?
These different but related questions are important if you are looking to buy a
home. And the second question is particularly important. With a high FICO score,
you can literally save tens of thousands of dollars in interest over the life o
f a home loan. So letâ s take a look at both questions. And if you donâ t know you score,
be sure to get you free credit score.
What credit score do you need to qualify for a mortgage?
The first thing to keep in mind is that qualifying for a mortgage involves a lot
more than just a credit score. While your FICO score is a very important ingred
ient, it is just one factor. Lenders also look at your income and level of debt,
among other things.
As a rule of thumb, however, a credit score below 620 will make buying a home ve
ry difficult. A FICO score below 620 is considered sub-prime. In the past there
were mortgage companies that specialized in sub-prime mortgages. Because of the
challenges in the credit market over the last year or so, however, sub-prime loa
ns have become difficult if not impossible to obtain.
A FICO score between 620 and 650 is considered fair to good credit. But keep in
mind, this range of credit scores does not guarantee you will qualify for a mort
gage, and if you do qualify, it wonâ t get you the lowest interest rate possible. Sti
ll, to buy a home aim for a score of at least 620, recognizing that other factor
s weigh in the decision and that some banks may require a higher score.
What credit score do you need to get a low rate mortgage?
It use to be that a score of about 720 would yield the lowest mortgage rates ava
ilable. Today, the best rates kick in with a FICO score of 760. And interest rat
es go up significantly as your credit score drops. To give you an idea, the foll
owing table shows current rates by credit score and calculates a monthly princip
al and interest payment based on a $300,000 loan:
FICO Score & 30-year Fixed Rate Mortgage
FICO Score APR Monthly Payment
760-850 4.643% $1,546
700-759 4.865% $1,586
680-699 5.042% $1,618
660-679 5.256% $1,658
640-659 5.686% $1,739
620-639 6.232% $1,844
Of course, the interest rates change daily, but the above table gives you an ide
a of the importance of a high score when you apply for a mortgage.
Contact me today and I will pull your credit for free. I can preapprove you over
the phone wihtin 1 hour. 502-905-3708 or email me at kentuckyloan@gmail.com