The credit score you need for a home loan varies on the type of loan you apply for. Some loans specify a credit score, while others don’t. Some require a percentage of the mortgage as a down payment while others don’t. Each lender and type of loan is different.
For example, Veterans Affairs loans (specifically for veterans, active-duty service members, and surviving spouses) typically do not require a down payment but may have a minimum credit score requirement. A United States Department of Agriculture (USDA) loan does not specify a credit score, but lenders usually seek a credit score of at least 640. These loans are applicable only for properties purchased in designated rural areas. Federal Housing Administration (FHA) loans need at least a 580 FICO Score with at least a 3.5% down payment (which amounts to $10,500 on a $300,000 home). Conventional loans require a minimum FICO® Score of 620 along with a 3% down payment (which amounts to $9,000 on a $300,000 home).
Consider all your available options, build your credit score, and save up for a down payment before you buy a house so that you can get the best out of what will probably be the largest investment in your credit history.
FAQs
Federal Housing Administration (FHA) loans need at least a 580 FICO Score with at least a 3.5% down payment (which amounts to $10,500 on a $300,000 home). Conventional loans require a minimum FICO® Score of 620 along with a 3% down payment (which amounts to $9,000 on a $300,000 home).
What credit score do you need to buy a 300K house? ›
What credit score is needed to buy a $300K house? The required credit score to buy a $300K house typically ranges from 580 to 720 or higher, depending on the type of loan. For an FHA loan, the minimum credit score is usually around 580.
How much do you need to make to afford a $300K house? ›
How much do I need to make to buy a $300K house? To purchase a $300K house, you may need to make between $50,000 and $74,500 a year. This is a rule of thumb, and the specific annual salary will vary depending on your credit score, debt-to-income ratio, type of home loan, loan term, and mortgage rate.
What credit score is needed to buy a $400k house? ›
Minimum Credit Score: 620
Suppose you can put 20% down on your $400k home and are otherwise able to qualify for a conventional loan. In that case, you'll probably get some of the lowest monthly payments available – apart from perhaps a VA mortgage.
How much money do you need to put down on a $300,000 house? ›
Conventional Loans often allow down payments as low as 3% – for first-time homebuyers. For a $300k house, this is a down payment of only $9,000. FHA Loans are another popular option, requiring as little as 3.5% down, equating to $10,500 for a $300k home.
Can I afford a 300k house on a 70K salary? ›
If you make $70K a year, you can likely afford a new home between $290,000 and $310,000*. That translates to a monthly house payment between $2,000 and $2,500, which includes your monthly mortgage payment, taxes, and home insurance.
How much house can I afford if I make $36,000 a year? ›
On a salary of $36,000 per year, you can afford a house priced around $100,000-$110,000 with a monthly payment of just over $1,000. This assumes you have no other debts you're paying off, but also that you haven't been able to save much for a down payment.
Can I afford a 300k house on a 60k salary? ›
An individual earning $60,000 a year may buy a home worth ranging from $180,000 to over $300,000. That's because your wage isn't the only factor that affects your house purchase budget. Your credit score, existing debts, mortgage rates, and a variety of other considerations must all be taken into account.
What is the payment on a $300,000 mortgage? ›
What Is the Monthly Payment of a $300,000 Mortgage? A mortgage of $300,000 will cost you $3,255.79 per month in interest and principal for a 30-year loan and a fixed 7.2% interest rate. The monthly payment will increase if you include taxes, mortgage insurance, and other fees.
How much does a $300,000 mortgage cost? ›
With interest rates at the time of writing (June 2024) hovering around the 5% mark and standard term lengths being 25 years, a mortgage of £300,000 will come with average monthly repayments of £1,754 and borrowers will have repaid £526,131 by the end of the term.
The median downpayment on a home is 13%, but if a buyer wants to avoid fees, including private mortgage insurance, they may have to put at least 20% down. If a buyer puts 20% down and takes out a $350K mortgage, they're likely putting down around $87,500.
How much income for a 300k mortgage? ›
With a 5% down payment and an interest rate of 7.158% (the average at the time of writing), you will want to earn at least $6,644 per month – $79,728 per year – to buy a $300,000 house. This is based on an estimated monthly mortgage payment of $2,392.
How much income do you need for a 350k house? ›
Following the 28/36 rule, a guideline many mortgage lenders use to gauge how much you can afford, you'd likely need to earn at least $90,000 per year to afford a $350,000 house without spreading yourself too thin. Keep in mind that figure does not include upfront payments, like your down payment and closing costs.
How much of a home loan can I get with a 650 credit score? ›
Your credit score typically won't affect the home loan amount you're able to receive. Instead, it will affect the interest rate of the loan. The lender will determine how much you can borrow based on a number of factors like your income, debt-to-income ratio, and more.
How much of a loan can I get with a 620 credit score? ›
You can borrow anywhere from a few thousand dollars to $100,000+ with a 620 credit score. The exact amount of money you will get depends on other factors besides your credit score, such as your income, your employment status, the type of loan you get, and even the lender.
