Credit scores are one of many factors that you need to take into account before purchasing a home, but the minimum credit score that is required to get a down payment is around the 650 mark, but a score of around 720 or above will get you the lowest interest rates possible. Here are some things you might want to know about credit scores that can help you when purchasing a home.
The higher your credit score, the lower the interest rates. If you have a high credit score, then you will be getting the best and lowest deals on interest rates on your new home purchase. On some sites such as bankrate.com, you are required to have a credit score of 760 or above in order to get the lowest rate possible. If you have a credit score ranging from anywhere between 660-759, then you are still able to qualify for above average interest rates but aren't able to achieve the best ones. If your score is anywhere below 660, count on seeing a sharp hike in interest rates, and if your score is below 580, It is almost guaranteed that the interest rate will go up by at least 4 percentage points.
Another factor you need to take into account is whether or not you are going to purchase an FHA loan, as your credit score will affect this. The purchase of these loans brings along advantages such as the 3.5 percent down payment and the ability to qualify for a loan with a past bankruptcy or foreclosure. You must have a credit score of 580 or above if you want to qualify for one of these loans. Otherwise, you will be submitting a down payment of 10% or more and will be paying much more costs than anyone with a credit score at or above 580.
To sum it up, you need a score of about 650 in order to get a mortgage and a score between 660-759 to get an above average and favorable interest rate. The most favorable interest rates you can get go to the people with credit scores of 720 or above, and the lowest go to scores that are lower than 660. I would advise you to consider all of these factors and use them to your advantage before purchasing a home. Good luck with your decision!