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What Credit Score Do I Need To Qualify For A Conventional Home Mortgage Loan?

By Bob Redtree

How your credit score can determine if you qualify for a conventional home loan.

If you are trying to purchase a house, you may be wondering what credit score you need to qualify for a conventional home mortgage loan. There are many things that determine your FICO credit score. Your payment habits will have a big impact on what score you have received.

Conventional loans

A conventional home mortgage loan can be 10, 15, 20 or even 30 years. It is obtained through a bank, or credit union which is backed by the FHA. Most people get pre-qualified prior to looking for their dream house to determine the price range they can afford.

How is your credit score determined?

Your credit score is an average of the three credit reporting agencies. These agencies are Equifax, Experian, and TransUnion. A composite average of these three score determines your credit score. This score is based upon your timely payment status, outstanding debt on credit cards, and any other debts or liens such as car loans, medical bills, etc.

Credit scores determine interest rates

The credit score that you need to qualify for a conventional home mortgage loan is 660. This is the lowest tier level that allows you to get a loan without any problems. If you score is 620 or lower then you would have to try and get a subprime loan. These have higher than average interest rates which you might not be able to afford. If you can afford the payments you might want to get a fixed 30 year loan and make your mortgage payments on time for a few years and then try and refinance at a lower interest rate. You would have shown that you do make your payments and your credit score should have rise as well.

Lowest credit scores to qualify for a conventional home mortgage loan
The lowest credit scores to qualify for a conventional home mortgage loan are 500 to 520. Many do not offer programs for a score this low. So you will need to inquire with different banks to see if they will work with you. However, if possible you can increase your chance for getting a loan if you have a large down payment. A thirty percent down payment will make banks feel more secure and might get the loan for the house you want.

Related posts:

1. What Credit Score Do I Need To Qualify For An FHA Home Mortgage Loan?
2. What Are Mortgage Interest Rates For An Average Credit Score?
3. How Do I Qualify For A Better Mortgage Interest Rate?
4. How Do Conventional Home Loans Compare To FHA Loans?
5. Can a Great Credit Score Guarantee the Best Mortgage Rates?