What Credit Score do you need to be able to Qualify for a Mortgage in Florida?

The exact credit score needed to buy a house varies from one loan to another. This may depend on the loan amount you will get and the type of loan you are applying for. The chance to get a mortgage gets slimmer if you have a lower credit score. Generally, the loan with the lowest credit score requirement is a portfolio mortgage loan. Most of them require a minimum credit score of 580. A VA loan usually requires at least a 620 credit score. An FHA loan will usually require a FICO score of 580, while a USDA loan, jumbo loans and conventional loans (Fannie Mae and Freddie Mac loans) are the highest with a minimum credit score of 640 or higher.

minimum credit score needed to buy a house in florida

Buying a home in Florida is not something you can do overnight. There is a lot of work involved with the home buying process. You not only have to find the perfect home for you and your family, but you also have to find the right mortgage loan. If you’re ready to see what you can afford, get started by getting a rate quote, for free.

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There are various factors that a lender looks at to decide what kind of rates you’re eligible for, and if they should sanction the loan for you. For example, they will take a look at your income, debt, debt to income ratio, savings, and also your credit score to decide if they should approve or reject your application. Before you even start the house hunting process, it may be a good idea to take a look at where your credit score stands, and see if there is anything you can do to improve your credit score. 

First off, how are credit scores determined in Florida? Also known as FICO score, your credit score is determined by five factors. They are:

  • Your credit payment history
  • Your amount owed
  • The length of your credit history
  • New credit and the type of credit used

The most influential item is your credit payment history which carries 35% weight of your credit score followed by the amount owed at 30% and then the order proceeds as stated above, with each of the remaining items boasting a weight of 15%, 10%, and 10% respectively, that completes your credit score computation.

What credit score is needed for a VA loan in Florida?

The Department of Veterans Affairs does not impose minimum credit score requirements to qualify for a mortgage, but the mortgage lenders who make the loan do. Usually a 620 is the average, but in some cases lenders will go as low as 520. VA loans are insured by the federal where they guarantee a portion of each loan and do not require private mortgage insurance. It has 15-year and 30-year terms and offers lower interest rates.

What credit score is needed for an FHA loan in Florida?

FHA loans are government backed mortgage loans. FHA loans are backed by the Federal Housing Administration under a government agency, the Department of Housing and Urban Development. FHA credit requirements depends on the type of home loan you are applying for. FHA loans require a 3.5% down payment for 580 and higher credit scores. If you can make 10% downpayment for your FHA loan, credit score needed can be in the 500-579 range. 

What credit score is needed for a USDA loan in Florida?

The US Department of Agriculture or USDA offers home loans for low-to-moderate-income home buyers. USDA has three credit types: direct loans, housing repair loans, and guaranteed loans. Many lenders that offer USDA loans require a minimum of 640 FICO score. 

What credit score is needed for a Conventional loan in Florida?

Conventional loan is a loan type that is not government backed, so lenders are at greater risk. If you need to buy a home, a conventional type of mortgage can be tough to obtain. The minimum FICO score needed for a conventional loan is around 640. Having a credit score of 740 or better will greatly increase your chances of getting a better rate though.

Can you still get a mortgage in Florida with a lower credit score?

If your credit score is low, the good news is that you can improve your credit score in a very short period. Here is how:

  • Keep your credit card balances as low as possible
    You can opt to make small frequent payments for your credit card throughout the month. This will help you keep your credit card balances low and improve your credit utilization in your credit report. There are credit cards that give free FICO scores.
  • Only take credit that you can repay
    To put your low credit scores away from more risk, take credits that you know you can afford to pay over time. Getting credit with no guarantee that you can make payments during its term will hurt your financial standing and your credit report significantly.  
  • Pay your bills on time
    Credit history bears the largest percentage in the computation of your credit scores, late payments can reflect on your credit report for up to seven years. If you miss a payment for 30 days or more, call the creditor to arrange your payment. Ask if the creditor will consider not reporting your late payment to the credit bureaus. If the creditor won’t allow it, showing a lot of positive credit behaviors to offset the damage can be your option in improving your credit.
  • Stay away from high-interest credit
    Higher interest rate credit requires higher payments. You might need emergency money from credit but look for alternative loan types than risking on high interest credit. 
  • Check your credit reports frequently
    An error on your credit report could be the reason for your low credit score. Fixing these disputes will quickly improve your credit scores.  

For more on how to handle your credit and increase your credit score talk to us today, we offer free credit reports. Don’t let your FICO scores be the reason why you can’t own your dream home in Florida.