What Score is Needed to Purchase a Home

What Score Is Needed to Purchase a Home

Credit scores are more important than ever for buyers these days. After the subprime lending crisis that came to a head in 2007, the federal government began to tighten down on mortgage lenders. In response to the alarming number of mortgage foreclosures, the government stepped up regulation of lenders. As a result, those mortgage lenders now pay closer attention to a borrower's credit score today than they did a few years ago.

So what kind of score does a home buyer need in the current economy? Of course, it depends on the individual mortgage company and/or lending institution. But one thing is for certain, a better credit score will certainly make your home buying process easier. It will help you qualify for a loan quickly, and it will also help you secure the best interest rate on that loan.

Ask ten different financial experts what the average credit score in the U.S. is, and you will probably get ten slightly different answers. With that said, most will agree that the average score falls between 650 and 700. Keep in mind that when talking about credit scores, higher is better.

Additionally, a score of 720 or higher is ideal for the home buying purposes. You will have no trouble qualifying for a mortgage loan with a score over 720, and you'll also quality for the best interest rates and terms.