Tag Archives: Refinance

Update on What Credit Score is Needed to Buy or Refinance a Home???

Credit PigI get ask this question a lot and wrote a blog on this back in October 2013 and since the lending industry does change often I thought I would update you on Lender Requirements on credit scores.

Lenders have become a little more open when it comes to their credit score requirement, typically now it is 620 for government (FHA, VA & USDA) loans.  Conventional loan requirements for credit scores are typically higher than government, this is due to the face that government loans are “guaranteed” or “insured” by the government.  So that lessens the lenders risk.

The credit score the lenders go off of is your middle score of the 3 credit scores they get when they pull your credit.  If the loan has more than 1 borrower the lender will go off of the lower of the 2 middle scores.

The higher your credit score is the smoother the loan will be underwritten “typically” and the better your interest rate.  So someone with a 760 mid score typically gets a better rate than someone with a 620 mid score.  The reasoning behind this is risk factor, the lower your score the higher the risk taken by the lender to extend the mortgage loan to you.

The down payment amount / percentage plays into the approval!  Let’s say you have a 640 credit score and you will be putting 40% down on your new home.  Since the lender is taking less of a risk the chances are pretty good that you will be approved.  The larger down payment lessens the lender’s risk and they are more open to doing the loan.  This of course is contingent on what derogatory credit is reporting on your credit report.

While some lenders say they will loan to borrowers with scores lower than 600 but I have yet to see one close.  I am from Missouri and “You have to Show Me”!!! LOL

Bottom-line you will need a middle credit score of 620 or higher.

If you have any questions please don’t hesitate to ask and I will answer.

 

Blessings,

Cindy Seely

NMLS # 245378, Mo 10-1649-MLO, Ks 0009720

 

 

 

 

Late Update

Celebration Happy, Happy, HAPPY!!!!!!!  

I wanted to let everyone know that in May 2014 I took a new position with a new company.  I am the Western Missouri Manager & Loan Officer with National Asset Mortgage “America’s Finance Professionals”.

I am so blessed to have been given this opportunity in life.  National Asset Mortgage is a mortgage broker licensed in 35+ states!  😀

So if you are looking to buy that new home or are ready to refinance give me a call and let’s talk.

Also if you know of someone who is looking for mortgage loan please send them my way, I would really appreciate it.

Blessings,

Cindy Seely

Western Missouri Manager & Loan Officer

National Asset Mortgage, L.L.C. NMLS# 836952

NMLS # 245378, Mo 10-1649-MLO, Ks 0009720

What Credit Score Do You Need to Get a Mortgage?

Credit Score Mag GlassDo you know the answer to this question?  If your answer is “No” realize you are not alone.

If you are thinking of purchasing a new home or refinancing your existing mortgage it is Tremendously important to know what the minimum credit score requirements for mortgages.

If your credit score is to low you probably will not get approved for a mortgage loan. Your credit score will not only have an effect on being approved but also on what interest rate you will pay.  The Higher your credit score the lower your interest rate will be.

Minimum Credit Score Requirement for Mortgage Loans:

FHA : Minimum credit score “typically” is 640 with most lenders.  There are a few lenders out there that say they will go down to 580 but I have yet see or hear of one closing.

VA:  Minimum Credit score “typically” is 640.

USDA:   Minimum Credit score “typically” is 640.

Conventional:   Minimum Credit score is 680.

Mortgage lenders go off of your “Mid Score” which is the middle of 3 credit scores; example if your credit scores are 646, 687 & 669 the lender will use 669. If you by chance only have 2 credit scores they will go off the lower of the 2 scores.

I would advise you to shoot for a credit score of 740 or above that should be your goal.  The higher your credit score the less the risk the lender assigns to your mortgage and the better your interest rate.

The banks / lenders use your credit score to assign a “risk” to you mortgage.  When lenders analyze / underwrite mortgages your credit score is a major factor in loan approval.  Your credit score not only impacts the interest rate you pay but also the maximum loan to value for your loan.

With the current changes in lending it is very likely that lender criteria will require higher credit scores in the future.  So be prepared and work on increasing your credit score.

I would suggest checking into your credit score several months in advance of wanting to buy your new home.  A web site that I recommend is creditkarma.com it is a free site and they do not ask for credit cards.  They also give you FREE credit scores!

I would suggest checking your credit every 4 – 6 months to make sure it is accurate.  If you have a lender/bank pull your credit then your score will take a “hit” of 5 – 7 points to your credit scores.  But going into CreditKarma.com and pulling your credit report will not reduce your credit score.

If you have any questions on this or if you are ready to see about a new mortgage give me a call!

Blessings,

Cindy Seely

NMLS # 245378, Mo 10-1649-MLO, Ks 0009720

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  “I am upfront and to the point and I do what is best for my clients!” – Cindy Seely

 

Cindy Seely,  (816) 728-1384, Cindy@CindySeely.com                                
NMLS – 245378, Mo. 1649-MLO, Ks. 0009720, licensed in Missouri & Kansas                                                                                 
360 Mortgage Inc.,  28 Westwoods Drive, Liberty, Mo 64068   NMLS 80777