Lenders may determine how probable you are to repay the money you borrow based on your credit score. A low score, often called "bad credit," in certain circles might prevent you from being authorized for credit, while a high score sends all the proper signals. When it comes to purchasing a house, a credit score that is below 620 is typically considered to be poor.

The minimum credit score required to purchase a home is contingent upon the financing sought. Generally, the credit score criteria for conventional mortgages are higher than those for government-backed lending programs such as FHA, VA, and USDA mortgages. Nonetheless, the final authority on determining the minimum credit score required for each loan product lies with the lender.

When considering an application for a mortgage, lenders look at more than simply the applicant's credit score. If your credit score is close to or exactly at the minimum required by a lender, they may demand a larger down payment from you, charge you a higher interest rate, or force you to pay additional costs. In a nutshell, you risk paying a higher total amount for your house loan. The most effective strategy for avoiding these fines is to improve your credit score before applying.

New American Funding

Beneficial for: Borrowers purchasing their first home as well as other borrowers searching for a diverse selection of financing options.

Pros

• Provides a broad range of mortgage options for purchase and refinancing, with the primary goal of assisting underprivileged populations.
• It is possible to utilize either an owner-occupied or a second house as collateral for its home equity line of credit.
• Provides potential purchasers with a service that enables them to make cash bids.

Cons

• According to the most recent statistics from the federal government, mortgage origination costs tend to be on the higher end.

Northpointe

Beneficial for people in need of a wide variety of loan options, such as one that requires no initial payment but still helps homeowners build equity in their homes more quickly

Pros

• A comprehensive selection of available financing options.
• Provides financing with no down payment required and a shorter repayment period, assisting in speeding up the buildup of home equity.
• Modern conveniences include a smartphone app.

Cons

• To get tailored mortgage rates, you must give your contact information or talk with a loan officer.
• According to the most recent available statistics, origination fees tend to be on the higher end.

Fairway Independent Mortgage

Borrowers who desire access to a broad array of mortgages, such as ITIN and remodeling loans, are the ideal candidates for this product.

Pros

• Provides a wide variety of lending options, such as Individual Taxpayer Identification Number (ITIN) loans for borrowers who do not have Social Security numbers, loans for home renovations, loans for self-employed borrowers, and mortgages guaranteed by the government.
• According to J.D. Power and Zillow, it achieves a high level of success in terms of customer satisfaction.

Cons

• The interest rates on mortgage loans for the various kinds of loans are unavailable online.
• According to the most recent statistics from the federal government, origination costs are on the higher end of the spectrum than those charged by other lenders.

Watermark Home Loans

Beneficial for borrowers who are seeking a substantial number of loan kinds, including some possibilities that are not quite as typical, such as non-QM loans.

Pros

• The online capabilities include a complete application and information about loan processing.
• According to the most recent statistics made available by the federal government, the lending institution provides competitively low-interest rates.

Cons

• The interest rates that Watermark charges for mortgages should be made public on its website.
• While Watermark advertises that it provides HELOCs, there is no information on these loans accessible online.

Citibank

Beneficial for: Buyers interested in investigating low down payment mortgage options, such as Citi's proprietary choice and loans guaranteed by the government.

Pros

• It provides a broad range of lending choices, some of which include jumbo mortgages and mortgages requiring a little down payment.
• According to the most recent information, it offers competitively cheap interest rates compared to other lenders.
• According to J.D. Power and Zillow, it achieves a high level of success in terms of customer satisfaction.

Cons

• You will need assistance from a loan officer to complete an online mortgage application.
• It is not possible to get customized mortgage rates without first making contact.
• Does not provide financing for home improvements.