What Credit Score Is Needed to Buy a House in 2022?

Buying a home can be a stressful and complicated process, you may be wondering, what credit score do you need to buy a house? In addition to being a complex purchase with all manner of contracts, most buyers also require a mortgage. To qualify for a mortgage, buyers need to meet several criteria including having enough income to make payments, having a debt-to-income ratio below a certain percentage, and possibly proof of stable employment. Certain mortgages require that the home being purchased be the primary residence of the buyer. Of course, the borrower must also have good enough credit to qualify for the mortgage.

Unlike a credit line issued by a retailer while you are checking out your purchases, your credit report will be read by the lender. This means that your credit score is not the only information used to issue a mortgage. Some lenders may require higher or lower scores depending on what information is in their credit report.

So, what credit score do you need to buy a house? The minimum credit score for an FHA mortgage is 500. Borrowers with a credit score between 500 and 579 may qualify for an FHA mortgage, but only if they put down at least 10 percent. Borrowers with credit scores above 580 qualify for maximum funding, which requires a 3.5 percent down payment. There are additional requirements for  FHA loans, such as maximum loan amounts that vary by area according to the cost of housing in that area.

Borrowers with lower credit scores may still be able to buy a home. Not all mortgages are FHA loans and many lenders will work with home buyers with low credit scores. Different mortgages may still be available regardless of credit score based on other factors such as the amount of the down payment, or a high enough verifiable income.

Regardless of what type of mortgage, borrowers with higher credit scores will be eligible for more types of mortgages and qualify for lower interest rates.