We often talk to first time home buyers who want to know the minimum credit score requirements for a mortgage in North Carolina. The answer, while not complicated, is not one where I can just spit out ONE number as a benchmark for all mortgage programs. I can pretty easily say, however, that from a CREDIT SCORE ONLY perspective – Minimum Credit Score Requirements For FHA Loans 2014 are probably the most “forgiving.”
The minimum credit score requirements for a mortgage depends on which type of program you are applying for, what type of housing you are purchasing, and what down payment you will be making.
Minimum Credit Score Requirements for FHA Loans:
The minimum down payment for a FHA Loan is 3.5% and the FHA monthly PMI is 1.35%. No matter what your credit score is – you can will get today’s best mortgage rate for a FHA loan, and your PMI factor will not change.
With FHA Loans, you can have a non-owner occupied borrower added to the loan – however the co-signor does not offset bad credit, so the person who is living in the house needs good credit.
While not all banks will do this, our Bank will make FHA Loans for Folks with minimum credit scores between 580 and 619. If you have excellent offsetting, compensating factors, like extra funds left over after closing, and very low debt to income ratios, you can get a FHA loan with minimum credit scores below 620.
The maximum debt to income ratio for FHA Loans with scores between 580 and 619 is 43.0000%. For folks with this credit score profile, the Down Payment can NOT be a gift.
For MOST people, the Minimum credit score requirements for FHA Loans is 620. For these folks, you don’t need as many compensating factors. Maybe you have some unpaid medical collections on your credit report, or you are getting Gift Funds for your down payment – then the next minimum credit score we will try to get you approved at is 620.
The FHA Loan Automated Underwriting system is set to approve loans with a minimum credit score of 640. Those with scores below 640 will sometimes get an automatic approval through the system – but usually those will be Manual Underwrites, meaning you will have more documentation requirements.
It’s important to remember that your credit score is just a snapshot of what your credit looks like at a given moment. What I’m trying to say is – If you don’t currently have the credit scores you need to buy a home in NC don’t give up. ANYONE can increase their scores to be able to buy a home, and normally we can help someone do that in as little time as just a couple of months.
If you have questions about minimum credit score requirements for a mortgage, or want to know ways that you can RAISE your credit scores, you might want to read the section on this page about: If you have a credit score of 600, or higher here are the steps we suggest you take NOW.
Need specific information about your situation and Minimum Credit Score Requirements for a Mortgage, call Steve and Eleanor Thorne 919 649 5058.; We work with people in NC every month who thought they would never be able to buy a house, and found that it was much easier than they thought!