The Jersey Shore by Karl Hess

What Credit Score Do You Need To Buy A House?

There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed!

See EVERY Home in Ocean County for Sale!

Only 25% of the Americans have a FICO® Score between 740 and 800. Here is the breakdown according to Experian:

  • 16% Very Poor (300-579)
  • 18% Fair (580-669)
  • 21% Good (670-739)
  • 25% Very Good (740-799)
  • 20% Exceptional (800-850)

Randy Hopper, Senior Vice President of Mortgage Lending for Navy Federal Credit Union said,

Just because you have a low credit score doesn’t mean you can’t purchase a home. There are a lot of options out there for consumers with low FICO® scores.

Ocean County First Time Homebuyer Programs

There are many programs available with low or no credit score requirement. The Federal Housing Administration (FHA) now requires a minimum FICO® score of 580 if you want to qualify for the low down payment advantage. The US Department of Agriculture (USDA) does not set a minimum credit score requirement, but most lenders require a score of at least 640Veterans Affairs (VA) loans have no credit score requirement.

As you can see, none of them are above 700!

It is true that the average FICO® score for all closed loans in January was 726, but there are plenty of people taking advantage of the low credit score requirements. Here is the average FICO® Score of closed FHA Loans since April 2012 according to Ellie Mae:

As you can see, that number has been dropping for the last seven years. As a matter of fact, the average FHA Purchase FICO® Score reported in January 2019 was 675!

One of the challenges is that Americans are unsure about their credit score. They just assume that it is too low to qualify and do not double check. Credit.com confirmed that only 57% of individuals sought out their credit score at least once last year.

FICO® reported,

Since October 2009, the average year-over-year FICO® Score has steadily and consistently increased, from a low of 686 in 2009 to the latest high of 704 as of 2018.”

Here is the increase in the average US FICO® Score over the same period of time as the graph earlier.

Bottom Line

At least 84% of Americans have a score that will allow them to buy a house. If you are unsure what your score is or would like to improve your score in order to become a homeowner, let’s get together to help you set a path to reach your dream!

Karl Hess provides expert real estate services to residential buyers and sellers in Ocean County. Contact us today for more information on Ocean County Real Estate and for professional assistance navigating this complex home market.

As always, thank you for your time and feel free to get in touch if you have any questionsKarl Hess, Your Realtor on The Jersey Shore in Ocean County

 

 

 609-553-7926

Find Your Dream Home on The Jersey Shore in Ocean County!

www.TheJerseyShoreHomeFinder.com

 

 Licensed in New Jersey.  Keller Williams Shore Properties 

1400 Hooper Ave. Toms River NJ 08753 Phone: 732-797-9001

 

 

 

Comment balloon 2 commentsKarl Hess • March 31 2019 01:59PM
What Credit Score Do You Need To Buy A House?
share
There are many misconceptions about the credit score needed to buy a house. Recently, it was reported that 24% of renters believe they need a 780-800 credit score to be considered for a mortgage. The reality is they are misinformed! See EVERY… more
Become an Ocean County Homeowner
share
What are the Benefits of Becoming an Ocean County Homeowner? Every family has a list of important dates. We celebrate birthdays, anniversaries, pet adoptions…and the list goes on. For 64. 4 percent of households in the United States, this list… more
Barnegat Leaf Pick-up Schedule Spring 2019
share
Barnegat Brush and Leaf Pick-up Schedule Spring 2019 LEAF COLLECTION Please do not put leaves to curbside earlier than 7 days prior to your schedule week, and no later than 6:30 am on Monday of your scheduled week. The leaves will be collected… more
Price Your Barnegat Home to Sell
share
Is Your Barnegat House Priced to Sell Immediately? In today’s real estate market, with more houses coming to market every day and eager buyers searching for their dream home, setting the right price for your house is one of the most important… more
Are We Still Having Bidding Wars in Ocean County?
share
In a strong seller’s market, like the one we have experienced over the past few years, bidding wars are common and expected. This makes sense! A seller’s market is defined as a market in which the inventory of homes for sale cannot satisfy the… more
Buying a Home in Manahawkin
share
Finding the perfect Stafford Township Neighborhood Location, location, location. Half of buying a home is finding where you want to live. You may have found your dream house, but it might not be in your dream location. Here are the different… more
Buying a Home in Barnegat this Spring
share
Spring has sprung, and it’s a great time to buy a home in Barnegat! Here are four reasons to consider buying today instead of waiting. 1. Prices Will Continue to Rise CoreLogic’s latest U. S. Home Price Insights reports that home prices have… more
Coming Soon in Four Seasons Barnegat
share
Coming soon to this 55+ community just minutes to the beaches of LBI is a well maintained 2-bedroom, 2-bath home on a cul de sac. Be the first ones to see this home in prestigious Mirage Four Seasons… contact me today to see this home this… more
LBIF Discusses Bay-to-Table on Science Saturday
share
Barnegat Bay and nearby areas are a very productive area for a variety of seafood. The most popular fish species are striped bass as well as tog, sea bass and fluke. And let’s not forget scallops, claims, oysters and crab! Search for Homes on LBI… more
Selling Your Barnegat Home? Make Sure the Price is Right!
share
Thinking of selling your Barnegat home? Are you wondering how to price it to get the highest amount and sell quickly? If you’ve ever watched “The Price is Right, ” you know that the only way to win is to be the one to correctly guess the price of… more