What Credit Score is Needed to Buy a House Quotes in TN
What Credit Score is Needed to Buy a House in Tennessee
Buying a home in Tennessee is not something you can do overnight. There is a lot of work entailed in 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.
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, 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 you standing, and see if there is anything you can do to improve your score.
First off, how are credit scores determined in Tennessee? 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 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.
So, in Tennessee, what credit score is needed to buy a house? As mentioned already, the exact score varies from one loan to another. Generally, the loan with the lowest credit score requirement is a portfolio mortgage loan. Most of them require a mere FICO score of 600. FHA and VA usually require at least a 620 credit score while USDA, jumbo and conventional loans (Fannie Mae and Freddie Mac loans) are the highest with a FICO requirement of at least 660.
The good news is that you can improve your score in a very short period. Here is how:
Keep your credit card balances as low as possible
Only take credit that you can repay
Pay your bills on time
Stay away from high-interest credit
Check your credit reports frequently
For more on how to handle your credit and increase your credit score talk to us today. Don’t let your FICO score be the reason why you can’t own your dream home in Tennessee.
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