Shopping around for a mortgage can be a considerable enough task that contemplating all of the other ins and outs of a mortgage can be time consuming. However, if you’re serious about home ownership, your credit history and FICO score are very important in sealing the final deal. If you’re wondering what score is necessary to acquire a standard mortgage, here are the details on what you can expect.
The Importance Of Credit History
The amount of money you have in the bank and your yearly salary are very important factors in determining the likelihood of mortgage approval, but your credit history can make or break the deal. While those with poor credit may not have the opportunity for a conventional mortgage, potential homeowners who have paid their bills on time and kept their credit history in good order should have a more positive result for a conventional mortgage.
Requirements For Mortgage Qualification
There have been many changes to the mortgage approval process in recent years with advancements that have made it easier to acquire and review documents; however, there are still many things that are needed in order to submit an application. Beyond the data of your application, it is pertinent to provide your credit report – which will give a history of any bankruptcy or financial issues – as well as your current salary. Together, these factors will provide the information needed to approve or decline your application.
The Minimum FICO Score
When it comes to loan eligibility from the Federal Housing Administration (FHA), a FICO score of 580 is a requirement to qualify for a mortgage with a low down payment option. If the applicant is able to provide a more significant down payment, they may still be able to get approved if they have a lower credit score than 580. While mortgage lenders will sometimes make exceptions, improving your credit score or saving additional funds will go a long way towards application approval.
There have been many changes to the mortgage market in recent years that have had a marked impact on the mortgage approval process. While the FICO score required has shifted as a result, those seeking a mortgage approval can still opt for a higher down payment or improving their credit score for a positive result. If you’re going to be on the market for a home in the future, you may want to contact one of our mortgage professionals for more information.