Mortgages and Credit Score

[Oche]

I am slowly building up my credit score.  Use to be in the low 400's at one point.  Young and Dumb!!!  Over 600 now.  At what point should I look at applying for a mortgage?  Should I look to get pre-qualified or pre-approved now?  What is the difference between pre-qualified and pre-approved?

[guykara]

Pre qualifying is a method to show you how much of a house you can afford based on your income, your debt, etc. Anyone, regardless of credit, can find this information out.

During a pre-approval process, a bank is going to assess your entire financial situation including income, debt, credit score, credit report, etc.

[CreditHealthy]

Good morning! Congrats on your credit improvement. Continue to monitor your reports for inaccurate information and also refer to the forum for questions and advice.your scores need to improve a little more before you should consider a mortgage.....Good luck to you!

[Oche]

What score should I be looking at?  Do I need to hold that score for a certain amount of time?

[guykara]

For an FHA, I believe the minimum is ~580, but some places require 620. I would aim for the highest possible, of course

[c4sp14nx]

FWIW, no banks in my area (Columbus, OH) will approve an FHA with a score < 640; conventional requires a 680. 

[TimeToRecover]

The whole time you are going thru the home buying process you will need to ensure your credit stays as pristine as possible.  No New Account, No new applications, no missing payments etc.  Your credit will be pulled when you begin the process and then may or may not be pulled again just before closing.  AFTER closing if you want to apply for new credit you can (ie for furniture etc)

[EtereoX]

c4sp14nx ... just wanted to let you know that's not true. I'm working with a lender in OH who goes down to 550 I believe. 580 for sure. 

[stefnian0426]

I am in NJ. I have been talking with bank of america.

They said for a FHA my middle score must be a 620 or higher. If you have anything on your credit report- it must show paid.

[ezdriver]

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@EtereoX wrote:

c4sp14nx ... just wanted to let you know that's not true. I'm working with a lender in OH who goes down to 550 I believe. 580 for sure. 

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Yes ... I agree that its not true. That said, it certainy is rare. Chances of securing a mortgage with a mid score in the 500s are slim ... and the rest of the file had better be pretty strong. There is definitely a huge gap between published guidelines and real-world practices. Ask me how I know.