What credit score do you actually need to buy a home?

You can purchase almost anything with or without a credit score. However, a home is much harder to purchase without a credit score.

Credit scores play a pivotal role in the home-buying process. A credit score reflects how a person is able borrow and repay debt over time.

Most credit scores fall within a range of 350 to 850.

• 600: fair

• 700: good

• 800: excellent

Higher credit scores generally indicate a lower risk, which does help in qualifying, but it’s not the only factor taken into account for mortgage eligibility. The truth is, many loan products look at your overall financial profile to qualify you for a mortgage. Factors of your overall financial profile include:

• Income

• Employment History

• Savings and Assets

• Debt-to-Income ratios

• Credit History

However, many lenders and specific loan programs have minimum credit score requirements. Credit scores between 580 and 600 may have limited options.  Abbott Mortgage Group offer's financing for scores as low as 580. A 620 and above is typically a sweet spot! If your score is 0 to 579, there are no options, but you can create a plan to improve your scores.

There are two examples of programs in Tennessee that require a minimum credit score. They are the down payment assistance programs: the Housing Fund and the Tennessee Housing Development Agency (THDA).

• THDA

  • Minimum: 640

• The Housing Fund

  • Minimum 600 to borrow less than $10,000

  • Minimum 620 to borrow over $10,000

Now, it you don't have a credit score, there is still an option. The Federal Housing Administration (FHA) offers a no credit product. It's called a no-scare FHA loan. Abbott Mortgage Group offer's this product.

Credit scores are a key factor in financing a home, but they work in conjunction with other financial factors.