Acceptable credit scores for mortgages will vary a little, sometimes greatly, depending on where you go for the home loan. Your ranking will have a huge impact on the rate of interest you pay, as well as the chances of getting approved. While there is no perfect answer here, generally speaking, you will need to be close to the 700 range to have acceptable credit scores for mortgages. Of course, there is some wiggle room here, giving you a chance to qualify for a home loan, even if your ranking is in the 650 range, or a little lower. In fact, even if your ranking is in the low 600 range, you will have some options. If you're wondering about acceptable credit scores for mortgages, there are several things to consider. How are rates determined for home loans?
Low 600 Range:
Acceptable credit scores for mortgages will vary a lot. By using high risk house loan lenders, you have a better chance of getting approved for your new home, but you won't get the best home loan rates. This will be necessary for those in the low 600 range. In some cases, you will need to have large down payments, and you should expect to pay a higher rate of interest with high risk home lenders. Still, those with a lower ranking will be happy to know they may have acceptable credit scores for mortgages, so they can buy a new home.
There is some hope here, especially for those looking at all the low income home loan programs. There are several home buyer programs out there which offer assistance with down payments, money for repairs, and even tax credits. Acceptable credit scores for mortgages can be in this low range, especially if you can qualify for government home grants.
If you are in this range, you may want to consider having someone cosign the loan for you. This may help to reduce your interest rates, and allow you to avoid using a high risk home loan lender. Lower than acceptable credit scores for mortgages can sometimes be overlooked if you can get someone to cosign the loan for you.
Those in this range will typically have acceptable credit scores for mortgages, but it's not a guarantee for approval. Keep in mind that your ranking is good, but not great. With the banking industry tightening their guidelines, you may have some trouble. Still, you will likely be able to use a traditional lender with these types of acceptable credit scores for mortgages, so you have some options.
Those with acceptable credit scores for mortgages should not rule out government home buyer grants and programs. You may be able to qualify for these programs, which will take the total cost of the home down. Your lender may be able to assist you in finding out if you qualify.
Those with this ranking have acceptable credit scores for mortgages, and therefore, should not have too much trouble getting a home loan. You can even expect to pay competitive rates, as a reward for managing your finances. How much house can I afford? If you have a score this size, you can get much more.
NOTE: You can even negotiate a mortgage refi if you've lost your job, but your score hasn't dropped too much yet.