Yes, your 645 credit score can qualify you for a mortgage. And you have a couple of main options. With a credit score of 580 or higher you can qualify for an FHA loan to buy a home with a down payment of just 3.5%. With a score of 620 or higher you can qualify for a conventional loan, which typically offers lower interest rates than FHA loans.
Here’s a breakdown of your options and what you need to know:
FHA Loan:
- Minimum credit score: 580
- Down payment: 3.5%
- Pros: Lower credit score requirement, lower down payment
- Cons: Higher interest rates, mortgage insurance required
Conventional Loan:
- Minimum credit score: 620
- Down payment: 3% to 20% (depending on the lender)
- Pros: Lower interest rates, no mortgage insurance required (if you put down 20%)
- Cons: Higher credit score requirement, larger down payment
Other options:
- USDA Loan: This loan is available to borrowers in rural areas and has no minimum credit score requirement. However, most lenders require a credit score of at least 640.
- VA Loan: This loan is available to active duty military personnel, veterans, and surviving spouses. There is no minimum credit score requirement, but most lenders require a score of at least 580.
Tips for buying a house with a 645 credit score:
- Get pre-approved for a mortgage. This will give you a better idea of how much you can afford to borrow and what your interest rate will be.
- Save up for a down payment. The larger your down payment, the lower your monthly mortgage payments will be.
- Improve your credit score. You can do this by paying your bills on time, reducing your debt, and avoiding opening new credit accounts.
- Shop around for a lender. Different lenders have different credit score requirements and interest rates.
Things to keep in mind:
- Your credit score is just one factor that lenders consider when approving you for a mortgage. They will also look at your income, debt-to-income ratio (DTI), and employment history.
- Even if you have a 645 credit score, you may not be able to get the best interest rates. The interest rate you qualify for will depend on your credit score, DTI, and other factors.
- It’s important to compare offers from different lenders before you choose a mortgage.
A credit score of 645 is not ideal for buying a house, but it is possible. You can qualify for a mortgage with a score of 645, but you may have to make a larger down payment and pay a higher interest rate. If you are considering buying a house with a 645 credit score, it is important to talk to a mortgage lender to discuss your options.
Correct errors on your credit report
Begin by reviewing your credit report for any inaccuracies. Errors on your credit report can unfairly lower your score, affecting your loan eligibility and interest rates. Regularly checking your report and correcting errors promptly is a key step towards maintaining a healthy credit score.
Reducing your overall debt is crucial to improving your credit score. Focus on paying off high-interest debts first, such as credit card balances or student loans. This not only lowers your debt-to-income ratio but also demonstrates your creditworthiness to lenders.
Timely payment of all your bills is essential. Late payments can significantly impact your credit score. You can maintain a consistent payment history by making sure you never forget a deadline by setting up automatic payments or reminders.
Minimum credit score requirements can vary by lender
The Federal Housing Administration oversees FHA loans, while Freddie Mac and Fannie Mae oversee conforming loans. These agencies oversee the majority of mortgage programs.
These organizations establish the minimal requirements for each loan program, which has a direct impact on the credit score needed to purchase a home. However, lenders can impose stricter requirements, known as “overlays,” on borrowers if they choose to do so.
For example, FHA technically allows FICO scores as low as 500. However, most lenders won’t accept applications with scores lower than 580, and some even demand 620 for FHA loans.
According to Fannie Mae, the majority of mortgage lenders apply mortgage overlays. The most common overlay relates to credit scores.
This is why it’s smart to reapply for a mortgage if you’ve recently been denied. Your loan may have been turned down, but that denial could be because of an overlay. There’s a chance that a lender with more flexible requirements will approve you.
If you apply at a different bank, you may get better results.
Do You Really Need A Credit Score To Buy A House?
FAQ
Can I get a home loan with a 645 credit score?
What credit score do I need to buy a $250000 house?
What can I get with a 645 credit score?
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Type of Credit
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Do You Qualify?
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Unsecured Credit Card with Rewards
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YES
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Home Loan
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YES
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Auto Loan
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YES
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Personal Loan
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MAYBE
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What interest rate can you get with 645 credit score?
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700-759
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6.698 %
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680-699
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6.875 %
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660-679
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7.089 %
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640-659
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7.519 %
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620-639
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8.065 %
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Can you get a mortgage with a 620 credit score?
Make on-time payments on credit cards, loans and other debts. Some conventional mortgage providers will lend to those with a credit score lower than 620. Cardinal Financial Mortgage offers conventional loans, as well as FHA, VA, USDA loans, and will approve borrowers with a credit score as low as 550. Terms apply.
Is 645 a good or bad credit score?
645 Credit Score: Is it Good or Bad? Your score falls within the range of scores, from 580 to 669, considered Fair. A 645 FICO ® Score is below the average credit score. Some lenders see consumers with scores in the Fair range as having unfavorable credit, and may decline their credit applications.
Is a 645 credit score fair?
A 645 credit score is considered fair. Find out more about your credit score and learn steps you can take to improve your credit.
Is 645 a good FICO score?
74% of U.S. consumers’ FICO ® Scores are higher than 645. You share a 645 FICO ® Score with tens of thousands of other Americans, but none of them has that score for quite the same reasons you do. For insights into the specific causes of your score, and ideas on how to improve it, get copies of your credit reports and check your FICO ® Score.