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Myth: Home buyers in Washington State need perfect credit to qualify for a mortgage loan and buy a house.
Fact: While having excellent credit could help you land a lower interest rate, you don’t necessarily need a “perfect” credit score to qualify for a mortgage loan in Washington. Today’s lending industry is more flexible than most people realize.
It’s a common misconception that home buyers need excellent or perfect credit to qualify for a mortgage loan. The truth is that some mortgage programs offer quite a bit of flexibility, when it comes to borrower credit scores. The government-backed programs in particular (FHA and VA) can be fairly “forgiving” in this area.
So you don’t necessarily need perfect credit to buy a home in Washington.
Generally speaking, a credit score of 600 or higher will put a home buyer in a pretty good position to qualify for a mortgage loan. Just keep in mind there are other qualifying factors as well. These include having sufficient income to repay the loan, a manageable level of debt, and (in some cases) a down payment.
Note: The FICO scoring range runs from 300 to 850. A higher score is better. This is the scoring system used by most banks and mortgage lenders.
To be clear, there are benefits to having a higher score. Having excellent credit will not only make it easier to qualify for a mortgage loan in Washington, but could also help you secure a lower interest rate. And this could save you money over the long term.
Each month, the mortgage software company Ellie Mae puts out an “Origination Insight Report” that offers an in-depth look at mortgage lending trends in Washington State and nationwide.
One of the things they report is the average FICO credit score among closed loans. (These are successful home loans that actually reach the finish line.) By looking at the parameters associated with such loans, borrowers can get a better understanding of what it takes to qualify for a mortgage loan in Washington or elsewhere in the country.
Here are some credit score trends revealed in their latest report, from December 2017:
This report reveals a couple of interesting points regarding the credit score needed to buy a house in Washington state. First, it shows us that most of the home loans that successfully closed went to borrowers with credit scores of 600 or higher on the FICO scoring range. We can also see that the FHA mortgage program is a bit more forgiving, when it comes to credit-score requirements for borrowers.
Another important point: Mortgage lenders tend to look at the “big picture” when qualifying home loan applicants. So don’t be discouraged by anything covered in this article. The best way to find out if you’re a good candidate for a mortgage loan (and how much you might be able to borrow) is by speaking to a knowledgeable loan officer. And that’s where we come in!
Do you have questions about home loans? Are you ready to apply for a mortgage to buy a home? If so, Sammamish Mortgage can help. We are a local mortgage company from Bellevue, Washington serving the entire state, as well as Oregon, Idaho, and Colorado. We offer many mortgage programs to buyers all over the Pacific Northwest. Contact us today with any questions you have about mortgages.
Immediately after the housing crisis, buyers with poor credit struggled to find home mortgage loans. Now, the market has changed the buyers with poor credit have more options when it comes to mortgage financing. This article discusses some options for those who have bad credit but are in need of a mortgage to buy a home in Washington.
Summary: One of the major factors that influences a person’s ability to secure a mortgage is their credit score. But what if your credit score is lower than it should be? Are you doomed to have your mortgage application rejected?…