What Credit Score Do I Need To Buy a House in 2022 – Credit Tips For First Time Home Buyers

#credit #creditscore #buyingahome2022

What credit score do i need in order to get a house okay that is one of the most common ask questions that i see every day is what credit score do i need so let’s talk about that and in order to make this easy to understand i’m going to use a loan amount as an example and do my credit scores based off of that so going into jumbo territory is a different animal

So that will be handled in a different video so up front this is not in relation to jumbo loans so for my example we’re going to use a 500 000 loan amount okay so if you want to buy a house you know where your loan amount’s going to end up being 500 000 what credit score do you need okay now it depends on the loan program so if you’re looking at a conventional

Mortgage uh which you definitely could get at 500 right that would be a three percent five percent uh 10 15 20 et cetera down payment the minimum credit score for a conventional loan is 620. okay 620. let me say that again now if you’re looking at you’re like i’m not there yet what can i do well there’s fha with fha we can go as low as 580. so the minimum credit

Score for us for fha is 580. and if you’re like wait i’m a veteran what about me well 580 for you guys too okay so basically if you’re if you’re a veteran 580 plus if you’re fha 580 plus and then conventional is 620 plus okay now something very important to note is it depends on the lender you’re talking to so i’ve had a couple conversations this year where i’ve

Talked to people where they were like yeah you know i started looking in 2020 but the lender said my score was too low and i was like what was your score and they’re like 6 10 and i’m like oh i could have helped you and that’s what you guys need to know is that different lenders have different credit score requirements so you could have one lender say your score

Is too low and you could talk to another lender and they could say no problem and you’re like what how does this make sense i agree with you it’s very confusing so lenders are allowed to set the level of risk that they’re comfortable with you know in the va world two of the largest lenders will not go below 620. they’re not comfortable below 620. we are okay now

Does that mean you know and here’s how i look at credit because sometimes there’s so much shame around credit and i really don’t think there should be i’ve looked at 589 credit scores where the credit report on itself there’s some damage from the past but there’s really not much debt there’s like a credit card that’s being paid on time there’s just some past damage

Whereas sometimes i’ll look at a 680 credit report right and everything’s been paid on time recently but there’s so much debt they’re drowning in debt so score doesn’t always correlate to risk as much as lenders and everyone loves to say it does you know when i’m looking at the individual credit reports i’m trying to determine if you’re going to be able to pay back

The loan and being able to go down to as low as 580 gives me more power to help you guys you know so i really like that for fha and va because there’s this stigma that if your credit score is 580 590 600 you have terrible credit you must be the worst person and i see so many of those reports where i’m like oh you know there was some damage in the past but like it’s

Not bad at all and they’re they’re debt to income’s low like this is a good loan this is a great loan whereas some other lenders the way they’ve approached it is they’re just like nope everything else is cut off okay and in fairness we cut everything off below 580. so um overall if you guys are thinking about getting a house i think it’s really important for you to

Know what our minimums are okay 580 fha 580 va 620 conventional once again and the other thing i want to just make note of is if you’re looking at like credit karma or a third-party credit vendor their scores are not necessarily what i’m gonna pull okay because that’s a big confusion too so like for instance if you’re 580 on credit karma i would probably say wait

Till you’re at 600 or higher on credit karma because what i have found is often when i pull those scores we’re lower okay and the reason that we’re lower is that these third-party companies they’re not looking at your credit the same way we are we’re looking at your credit as if you’re taking out hundreds of thousands of dollars they’re looking at your credit as

That is if you’re taking out a thousand dollar credit card so obviously less risk to take out a thousand dollar credit card than to take out hundreds of thousands of dollars in loans now if you’re like well wait is my credit score going to vary based on lender no it shouldn’t really so if you pull your credit score with me on monday and bob with tuesday and jane

On wednesday your score is going to be in the same range okay it would be highly unusual for lenders to have huge variances there’s just a variance between the consumer products you guys have access to and the lender products we have so really important for you guys to note that you can get into a house if your credit’s not perfect don’t torture yourself because

Sometimes i’ll see people where they’re like well i’ve waited for five years because i wanted to get to this this number and the number that they’re shooting for it doesn’t actually really affect the big picture and they could have gotten in sooner and paid less rent had they just spoken with us and we could have said oh yeah like here’s the difference this is

What you should watch out for so i hope this video has been helpful if you need to get pre-approved for a loan or you want to talk about a loan i am licensed in 48 states and i am happy to help you as is my team we love taking care of you guys so thanks for watching i hope this was helpful

Transcribed from video
What Credit Score Do I Need To Buy a House in 2022 – Credit Tips For First Time Home Buyers 🏠💳 By Jennifer Beeston