A lot of would-be homebuyers out there assume they can’t buy a house because their credit isn’t good enough. For the most part, this is a myth—even if you have a subpar credit score, you can still qualify to buy a home.
Should you try buying a home with less-than-stellar credit, though? By and large, the lowest accepted credit score to qualify for any loan program is 580. Some lenders may use 620 as their minimum accepted score.
Obviously, if your credit score is too low, you won’t qualify to buy. Otherwise, having a low score means you won’t be able to get the lowest interest rates or qualify for most loan programs. The good news is, there are ways you can improve your credit score, so consult with a lender on how you can do this. Sometimes it’s as simple as paying off some debts.
“If you have a subpar credit score, you can still qualify to buy a home.”
Should you hold off on buying a home entirely while you raise your credit score? That depends on how much of an impact you can make and how long it will take you to make that impact. Again, consult with a lender and ask their opinion about your situation.
FHA loans are the most common loan programs buyers with low credit scores opt for. With these loans, the down payment and credit score requirements are lower. The downside, though, is that these loans can be more expensive in the long term. For example, you’ll have to pay mortgage insurance over the duration of the loan, whereas this isn’t necessarily the case with, say, a conventional loan.
In any case, don’t let a low credit score keep you from considering your options. There may be ways to help you find a house you and your family will love!
As always, if you have questions about this or any real estate topic, or you’re thinking of selling a home soon, don’t hesitate to reach out to me. I’m happy to help.
