Credit Scores Needed for Home Mortgage

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Depending on the type of home mortgage loan, the credit scores required to be approved for a loan range between 580 and 620 at a minimum. Find out whether a conventional home loan or an FHA home loan will suit your needs with information from a mortgage broker in this free video on home loans.

Part of the Video Series: Home Equity Loans & Foreclosures
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Video Transcript

Hi this is Matt McKillen with Innovative Financial Group. The question posed to me today is what type of credit scores are needed for a home mortgage. Well basically there's two types of mortgages available on the market today. One is what's called a conventional loan that's really more of a bank funded loan. Fannie Mae or Freddie Mac type mortgage. The other type of mortgage available is a government backed loan that being like an FHA or a VA home loan. All the lenders and programs have tightened their guidelines in the last 12 months due to the foreclosure crisis that's going on in the country right now. Traditionally on a conventional or Fanny Mae loan, they usually like to see a minimum credit score of 620. The higher the loan to value the higher the score is required to get the mortgage. 660 for example if you're going over 90% LTV. FHA is basically the best option available for lower scores. FHA traditionally will be funded by a bank with a minimum middle credit bureau score of 580 or higher and then they can do what's called a traditional underwrite. It used to be that you didn't have to have any score, they'd take scores as low as 540 but again because of the problems with loans in the country right now, the banks are tightening up. So to recap it, 580 minimum score for an FHA to really have a shot at getting a loan and on a conventional loan you're really looking at a minimum of 620 middle credit bureau score. Again my name is Matt McKillen and I'm with Innovative Financial Group.


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