With a score of 708, you fall into the excellent credit group; the next issue is whether you can get a mortgage and buy a property. The quick answer is yes, a 708 credit score qualifies you most likely for a mortgage. Still, there are some valid arguments to be made.
Your credit score will determine your loan conditions and interest rate as well as other elements such as your debt-to-income ratio, down payment amount you are ready to pay, and job history among other things. Still, if other factors of your financial status are not too terrible, a score of around 708 is often considered acceptable to qualify for a house loan.
What Credit Score Is Needed to Purchase a Home
Conventional mortgages call for a borrower with a credit score of not less than 620. Governmentally sponsored Federal Housing Administration loans call for a 580 score. But the credit score determines the interest rates borrowers pay; so, the rates also change when the credit score moves into the good and excellent ranges of 670 to 850. Your credit score is 708, so you should be able to locate FHA as well as conventional mortgage options.
only keep in mind that the lender sets the regulations; hence, not all of them determine whether to approve the loan depending only on your credit score. Your chances of obtaining your selected loan type, and lowest rate available, increase with increasing score. Mortgage rates and approvals, however, are influenced in part by income, assets, and down payment amount.
Getting to know how much house you can afford with a 708 credit score
Therefore, your debt-to-income ratio, savings for the down payment, and income level determine the amount of housing you can purchase in addition to your credit score. On the other hand, a greater 708 credit score helps you to acquire better mortgage rates that result in the acquisition of pricey houses.
For example, your interest rate determines the monthly principal and interest payments in a 30-year fixed-rate conventional mortgage valued at $300,000. Should your 708 credit score let you qualify for a rate of... Should your 708 credit score meet eligibility for a rate:
- This is equivalent to 3. 5 percent; therefore, your payment would be approximately 1300 dollars for one month.
- Your payment increases to 1,587 US dollars per month if you fall under 4. 5 percent.
While the lower nominal interest rate is useful, it saves you over 22,000 dollars in interest over 30 years on the same 300,000-dollar loan. That lower payment might help you still spend more on the house, and that would be safe for you.
It can inform you of the loan amount a lender can preapprove you for and decide on numbers by your budget. Overall, though, a 708 credit score enables you to secure reasonable interest rates and affordable houses in most areas.
Ways To Increase Your Likelihood Of Home Loan Approval
Even though 708 is a good credit score, getting your credit score to the mid-700s or above will help to ensure that you get the best mortgage interest rates. Here are some tips for boosting your score ahead of applying for preapproval: Here are some tips for boosting your score ahead of applying for preapproval:
- Make sure you pay all of your bills on schedule to guarantee your positive payment history. Enrolling for autopay can help you to ensure timely payment of your bills.
- The balances on the revolving credit cards should be less than thirty percent of the credit limit if one wants to lower the usage ratio.
- Before applying for a mortgage, avoid seeking new credit that leads to harsh queries on your credit records. Should too many fresh accounts and questions arise, your score will momentarily drop.
- Look for the anomalies you might challenge to be eliminated in the credit records of the three main agencies. Avoiding errors is thus crucial as they will lower your ultimate score.
- Positive stories like credit builder loans or secured credit cards would be smart to include to strengthen your credit profile if needed.
- At all times, credit balances should be modest; and credit history should be perfect. Over time, the additional seasoning improves long-term ratings.
Housing Possibilities With Poor Credit Ratings
It means a home loan may still be available even if the credit score drops below 708 in the future. Here are some options to get approved with a lower score: Here are some options to get approved with a lower score:
These include the FHA loans that allow down payment and only have a FICO score requirement of 580. USDA and VA loans are also great mortgage programs that are easy on credit scores and should also be considered when purchasing property in rural or military base areas.
Several large lenders provide non-conforming conventional loans that allow credit scores as low as 620 or thereabout. Interest rates are high to ensure that the lending risk is paid for compared to that of prime borrowers. But they offer fairly decent terms if your income and assets are good.
State and local housing agencies also support first-time buyer programs, such as low-down-payment loans and second mortgages or grants for closing costs. They provide credit options and home-buying seminars.
Last, but not least, try to approach small local banks and online mortgage companies in case the large national ones reject your application for a home loan. It is generally larger lenders who are less likely to offer near-prime consumers automated underwriting of their loan applications. These do allow home financing if there is some believable cause for poor credit in the past.
The Bottom Line Yes, a 708 credit score is usually acceptable for qualifying for most standard fixed-rate mortgages. So long as the rest of your financial qualifications are fine, homeownership should be a possibility with reasonable mortgages and terms.
If your score is 708 or higher, you should shop around and get preapproval. Be sure to make it easier before finalizing the mortgage papers for the best interest savings in the long run. However, overall, having that credit score means you are in good standing to be able to purchase a home now with favorable interest rates.
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