Credit Score Requirements for Mortgage

How to Improve Credit Scores and Buy a House in NC

Potential Home Buyers ask us everyday, “How can I improve my credit score???”  There’s not a simple answer, because every credit history (and score attached to that history) is like a snowflake. Credit Score Requirements for mortgage are different based upon the kind of mortgage you are looking for.  In general, you will need a credit score of at least 600 for a FHA loan, and 620 for a VA Loan.  Conventional Loans usually require a minimum credit score of 660 – but credit scores over 720 will get the best pricing (today’s best mortgage rates).

The minimum Credit Score Requirements for mortgage, if you are looking for a USDA Home Loan changed in October of 2014.  They now require a minimum of a 640 score, or a 680 score if you want an “Automatic approval.”  READ —>> now tougher to get a USDA Home Loan, anyone UNDER a 680 score must meet all guidelines, perfectly.  

If you are close to these Credit Score Requirements for mortgage “Credit Score Numbers,” or if you qualify for a NCHFA program, (which requires two scores to be over 640, you are probably CLOSE to being able to buy a house in North Carolina!  The NCHFA is much easier, right now, to qualify for than a USDA Home Loan! If you qualify for the NCHFA program, the State of NC GIVES YOU the money for your down payment in the form of a GRANT.

Ready to buy a house??? We want to help!  CALL US!  919 649 5058, it doesn’t cost ANYTHING to get our opinion of what you need to do next!

There are some concepts that are important to understand about Credit Score Requirements for mortgage / Minimum Credit Scores and ways you can go about improving your credit score – no matter what loan program you are applying for:

  • Late Payments Showing on Report: If your report shows one or two late payments over a LONG period of time (probably more than 8 months ago).  Call the Customer Service Line and ask very nicely for it to be removed. If the Customer Service Rep does not have the authority to remove the items (which they normally do not), ask for a supervisor.  Be nice, beg, beg, and beg some more! It really is important to have any documentation available to show the company that it was a simple mistake (like put the wrong payment in the wrong envelope when paying bills one month – I’ve done that before but you need the evidence of the check returned and the letter from the other company).  This sounds a little crazy, but going head on really is the simplest way to get late payments off.  Sometimes it works! If you feel that the late payments are in error you can begin the dispute process.
  • High Balances On Credit Cards:  Look on your report for the balance between your Credit Limit and your Current Balance. If you have high balances on some cards but low ones on others, spread the balances around.  If you a shopping for a home – and need to elevate your scores – REMEMBER that most credit cards companies only report to the bureaus once per month.  This means that if you move balances around on the 15th of the month – it could take more than 45 days for the difference to reflect in your scores.
  • Having ALL student Loans, or Car Loans (installment debt) and no Revolving Accounts.  If you do not have credit cards, and can not be added to a family members account as an authorized user – you need to get a couple of Secured Credit Cards.  You can get them from the Bank at Wal-Mart.
  • Closing Credit Card Accounts: The “old wives tale” is that people should close old accounts, especially if you have a zero balance and no longer use the account.  If you are an Impulsive Shopper – I can see the reasoning in this train of thought.  However, you never want to lose years of a good payment history by closing a card you are no longer using.  “In fact, if you haven’t used them for a couple of years, they may have gone “stale” in the scoring model.  I say charge a tank of gas and pay it off when the bill comes to re-age them into the most recent scoring models.”

Remember that Credit Reports are Unique, and they can not be changed in a matter of a couple of weeks.  If you are considering a home purchase this year, call us NOW so that we can help you get your scores up!  IT WILL SAVE YOU TENS OF THOUSANDS OF DOLLARS!

Credit Score Requirements for Mortgage

FHA Mortgage Loans can have scores as low as 620, and the down payment can be a gift.  FHA does NOT have a maximum income requirement (like USDA), they also do NOT have a geographical footprint (meaning you can only purchase some addresses, FHA Loans do have a cap on the maximum loan in each county)… Unlike VA loans, FHA Loans do not require that the borrowers be married!!

Need more ideas about Gift Funds To Buy A House In NC??  You can also buy a HUD Foreclosed home for just $100 down payment!  There are TONS of options available.  Don’t let the image of a very small piggy bank hold you back from owing a home!

VA loans have credit score requirements that might make it easy to buy a home in NC too!

USDA Home Loans generally require two scores of 640 to 680.  Every county in NC has a portion that currently qualifies for USDA Home Loans, but those “boundary maps” changed SLIGHTLY in December of 2014.  In Raleigh, for instance, about 25 neighborhoods no longer qualify for the program, however – EVERYWHERE in Johnston County qualifies for the program.

If these changes mean that you might not qualify for a USDA Home Loan in NC – do not worry!  We are one of a handful of lenders in NC that also offer all of the NC Affordable Housing loans, which also provide Mortgage Tax Credits and Down Payment Assistance!  Best of all?  You don’t have to be a first time home buyer to qualify for these great programs!

Want to know specifics about the Credit Score Requirements for Mortgage and YOUR Credit Score?  We can run a simulator, and let you know what you will need to do to quickly raise your credit scores, with NO COST.  Call US! Steve and Eleanor Thorne, 919 649 5058 – find us on Facebook!