As a RE/MAX Real Estate Professional, I am often ask by a buyer looking for a home, How Much Down? What credit score do I need? Allow me to let you in on a best kept secret!
There is a misconception out there that buyers need a substantial down payment in order to buy a home these days, due to tighter lending standards or because of the “housing crisis” back in 2010. You may be surprised to learn that you can still purchase a home for as little as 3% down, or in some cases, for no down payment whatsoever, if the home is in a USDA area. Down payment programs include 3%, 5%, 10% or the conventional 20%.
As for credit score, lenders look for a median score of approximately 640. Factors also include annual income, job history and derogatory credit items. Even if you may have a foreclosure or short sale in your history, you may still qualify for a mortgage if it has been longer than 36 months and you have been current on all of your credit obligations.