How much credit do I have to build up before I can purchase a house?

Question

I have very little credit and I am tired of living in apartments. I want to purchase a house but I've heard I have to have good credit and at least a credit score of 700. I'm at 560 right now and to increase the credit score will take a long time. I just want to know is if I get it to a 600 will I be able to get a loan for a house? Thanks for all your answers and suggestions

Answer 1

I think with a score of 560, you in the realm of reality of getting a home loan now. The only stepping stone you might have is work history, or down payment. I think you are on your way to owning a home already.

Answer 2

You need to have at least 24 months of positive credit history. Someone had mentioned that he barely had any credit history, and got approved. There is a difference between getting preapproved, and getting an actual approval, which results from a complete application and file submitted to the bank. Anyone can call ELOAN and get preapproved, that doesnt mean squat. I'm a Loan Officer and this is a difficult market to try and purchase a house in. Think about it, if you were a bank what would you like to see from a potential client? Good, sustainable income, and a history of positive credit accounts, meaning there is a willingness on the client to pay their revloving lines of credit. The best advice I can say regarding home finance, is put yourself in the other persons position. Why would you think that a bank, that lends money, would lend that money to people who have displayed a history that they cant pay anything on time? Or that they have not had a history of paying anything. I know it sounds unfair, but again, it's a bank. Spend some time building your credit history, it really doesn't take long.

Answer 3

First of all whoever told you that you need 700 is flat out wrong.

And second, people have become preoccupied with credit scores as if they are the only thing that matters with a mortgage. The most important factor is and always be your income. The bank wants to know that you have suffiecent income to cover the loan. After that you have things such as down payment and other debts.

In general 560 is a score that will give you trouble with a mortgage. But if you have good income, a good downpayment and low other debts, you may find someone who will work with you. Work on getting that score up over 600 and alot more doors will open for you.

Answer 4

You have more options than you think; contact a loan officer. I recommend Smart Choice Mortgage. They do business in most states and are your best opportunity for someone to say yes. ADDITIONALLY, IF YOUR CREDIT IS SUSPECT, THEY SOMETIMES FRONT THE MONEY TO GET YOU INTO A CREDIT RESTORATION PROGRAM SO THAT YOU CAN QUALIFY FOR A LOAN. Check out the free evaluation form at the source website and a Smart Choice loan officer will contact you within 24 hours. Good luck.

Answer 5

You need a credit card, and a cell phone, paying off these bills ON TIME, or early, will build your score. Also buying a car will Greatly improve your score, the catch is you won't get a great rate with that score.

Buying a House and/or a Car are the two ways to greatly improve (or hurt) you credit, they are Major purchases, and therefor they rate heavy on your score.

Bottom line, Always pay off all your bills on time, or early, if your late, it will effect your credit negatively very quickly.

Answer 6

I just tried to get a home equity line on my house and for that they said I couldn't be below 630. My score happened to be at 610 and I was told I COULD refi the house (get a new mortgage) but that was more expense than I was willing to invest. So at 610 I could have purchased the house, but the better your score, the better the interest rate and terms will be, so if you can get your credit cleaned up/repaired, it is worth it.

Answer 7

Well, you probably can get a loan, but the interest rate would be pretty high PLUS you're gonna have to down pay a lot.
Usually, people down pay about 10-20% but if you have bad credit, you might have to downpay like 40%.
and since the interest rate would be high and considering down fall in real estate these days, I don't advise you to buy house now.

Answer 8

I got my home loan approved, just last month, im only 24 and I dont have any credit history at all... I have a 30 year note, and a high credit score, but no history, so you dont need credit history, or at least not much

Answer 9

there may be some condo situations that don't require solid credit as needed for the condo. Your debt to earnings ratio is extra significant. while you're finding to construct solid credit you will want extra beneficial than a student mortgage. credit comments are in accordance with extra beneficial than 6 months of history and in many circumstances they want to work out various strains of credit. you do no longer ought to spend lots money to maintain a credit card. basically want the will skill to no longer use it for each little thing your coronary heart desires and use it especially situations and keep it paid off. in case you do not have lots money then i've got faith you're growing to be to be a situation renting a house. Utilities often do no longer contain the hire, so as this is an further cost. in step with probability in case you initiate with a small condominium nicely interior of your earnings point which would be terrific. you will then have a reference for once you are able to hire that homestead that's maximum probable additionally a call for of condo.

Answer 10

If you have no open collections or negative reporting the last 2 years then you can buy now FHA and put just 3% down to close or less. You do not have to a score at all for FHA.
I am a mortgage banker in TN & KY