Credit Scores for Home Buying

In another move that will reduce the pool of qualified buyers, some of the major mortgage lenders will soon be increasing their minimum credit scores for home buying from 620 to 640. Flagstar Bank has already made this change and Bank of America will be making it shortly.  Other major players are sure to follow suit.

What does this mean for sellers?

Requiring higher scores means fewer potential buyers for your property. It all comes down to supply and demand and if the demand for homes decreases, prices will follow.  Now is the time to be sure that you are priced right – no “testing the market” allowed.

What does this mean for buyers?

Your credit score has always been an important factor in getting approved for a mortgage, but the criteria keeps getting more and more stringent.  If you are considering buying a home, check your credit report for errors that may be impacting your score and your ability to buy.

While it will still possible to get a mortgage loan with a lower than 620 FICO score, buyers will be forced to come up with a larger down payment and pay a higher interest rate on their loans.

If you need a referral to a local lender who still offers mortgages to challenged buyers, call us today at 504-327-5303.