Let’s not play around with this one. It’s hard to find information and plenty of companies will take advantage of a lack of expertise to make a sale (we’ve all seen advertisements promising you can buy the home of your dreams even if your credit is less than awesome). Here’s the breakdown for the top 3 loans you might need to apply for. 

  1. FHA Loans. This is number one on the list for a reason; it’s the most popular home loan for new home buyers, especially with middling to good credit. The lowest possible score is 500, but note that the lower your credit score, the higher the down payment you will likely be asked to make. For those working at the bottom of the available credit limit, this can mean a down payment of 10%. By contrast, if your credit score is 580 or higher, you can get away with a down payment of just 3.5%.
  2. Conventional Loans. You’ll need a credit score of at least 620-640. As with FHA loans, the higher your score the lower the down payment you can make. 
  3. Jumbo Loans. These are the loans where we see the widest variance. Mortgage programs are available for people with credit scores as low as 500, but typically you should expect to have a score of 680 or higher and, depending on the amount being borrowed and your needs, a score of at least 720 or higher is not out of the realm of possibility. Qualifying for one of these loans can be harder in other ways too, though a high-income earner or someone with little debt and the ability to make a large down payment may still find the loan terms more advantageous. 

As with every purchase, consider your home or property an investment and when in doubt, consult an expert to help you navigate your options.