Myth vs. Fact - You Don’t Need a Perfect Credit Score to Get a Mortgage



When it comes to getting a mortgage, many homebuyers believe that a perfect credit score is a requirement. This myth can discourage potential buyers from exploring their options. The truth is, while a higher credit score can certainly help, it’s not the sole determinant of your eligibility for a mortgage. Here, we’ll break down the myth and shed light on the options available for various credit types.

The Myth: You Need a Perfect Credit Score

It's commonly thought that lenders only want to work with those who boast a credit score above 800. While a stellar score can open up more favorable terms and lower interest rates, it’s not a dealbreaker. Many consumers miss out on homeownership because they believe they need to achieve this unrealistic standard.

The Fact: Options Exist for Most Credit Types
  • Flexible Lenders: Many lenders understand that life happens. Whether it’s medical bills, student debt, or unexpected circumstances, they often have programs designed for buyers with less-than-perfect credit.
  • FHA Loans: The Federal Housing Administration (FHA) offers loans with a minimum credit score of just 580. If your score is between 500 and 579, you might still qualify with a larger down payment.
  • VA and USDA Loans: For eligible veterans and rural residents, these loan options may not require a minimum credit score. They’re designed to support homeownership regardless of credit issues.
  • Co-signers: Bringing a co-signer on your mortgage application can bolster your chances of approval. If they have a strong credit history, this can help offset your score.
  • Building Your Score: If you’re not in a rush to buy, consider taking some time to work on your credit score by making payments on time, reducing debt, and disputing inaccuracies.
Conclusion

A perfect credit score is an outdated notion when it comes to securing a mortgage. Don’t let this myth deter you from pursuing your dream of homeownership. There are numerous options available to meet various credit types, and many lenders are willing to work with you to find a suitable solution. If you're thinking about buying a home, consult a mortgage advisor to explore your options and take the first step toward owning your dream home!

If you want more information or to discuss your options, you can contact the CashCall Mortgage team who are available to help guide you through the process.