how much of a home loan can i get with a 650 credit score

Can You Get a Mortgage with a 650 Credit Score in 2024?

If your credit score is a 650 or higher, and you meet other requirements, you should not have any problem getting a mortgage.  Credit scores in the 620-680 range are generally considered fair credit.

There are many mortgage lenders that offer loan programs to borrowers with credit scores in the 500s.  Therefore, if you have a 650 or higher credit score, you should not be short on options.

The types of programs that are available to borrowers with a 650 credit score are: conventional loans, FHA loans, VA loans, USDA loans, jumbo loans, and non-prime loans. If you are within the 650 score range, you may potentially be eligible for several different types of mortgage programs.

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Is 650 a Good Credit Score?

A 650 credit score is considered to be fair when it comes to lending and consumer credit. This means you are likely able to qualify for most mortgages, but the rate and terms you are offered will not be the best.

If your credit score is 650, your goal should be to improve to over 680. Setting reasonable goals to improve your credit score will make it more achievable. When a lender provides you with a rate quote for a 650 credit score, ask what your rate would be if your credit score improved.

A 650 credit score is good enough to qualify for a conventional, FHA, VA, USDA and a subprime mortgage. However, do not trust some free applications like Credit Karma as they tend to display scores that are unrealistically too high.

Understanding the Impact of Credit Score on Mortgages

A 650 credit score is considered fair to average by most lenders and mortgage brokers.  Credit scores and your credit history will have a significant impact on what mortgage programs will be available to you, and also the interest rate offered by the lender.

With a 650 credit score, you may qualify for a variety of mortgage options, including conventional loans and government-backed loans.

Lenders may require a larger down payment or charge a higher interest rate for individuals with a 650 credit score. Improving your credit score over time can help you qualify for better mortgage options and potentially lower interest rates.

Credit scores also are a deciding factor with underwriters when a loan application is borderline. They look for compensating factors and higher creditworthiness is one of them.

Conventional Loan with 650 Credit Score

The minimum credit score requirement to get a conventional loan is 650.  In order to qualify for a conventional loan, you will need to meet all other loan requirements.  This includes having at least 2 years of steady employment, a down payment of at least 3-5%, and no recent major credit events (such as a bankruptcy or foreclosure).

Would you like to find out if you qualify for a conventional loan?  We can help you get get approved for a conventional loan in your location.

Click here to get matched with a mortgage lender

FHA Loan with 650 Credit Score

FHA loans only require that you have a 580 credit score, so with a 650 FICO, you can definitely meet the credit score requirements.  With a 650 credit score, you should also be offered a better interest rate than with a 580-619 FICO score.

Other FHA loan requirements are that you have at least 2 years of employment, which you will be required to provide 2 years of tax returns, and your 2 most recent pay stubs.  The maximum debt-to-income ratio is 43% unless you have satisfactory “compensating factors”, such as a higher down payment, or cash reserves. Then the maximum DTI can be up to 56.9%

Something that attracts many borrowers to FHA loans is that the down payment requirement is only 3.5%, and this money can be borrowed, gifted, or provided through a down payment assistance program.

Click here to find out if you qualify for an FHA loan.

USDA Loan with 650 Credit Score

The minimum credit score requirements for USDA loans is now a 640 (for an automated approval) but lenders are approving USDA loans with scores down to 580.  Therefore, with a 650 credit score, you will satisfy the credit score requirements for a USDA loan.

Other requirements for USDA loans are that you purchase a property in an eligible area.  USDA loans are only available in rural areas, as well as on the outer areas of major cities.  You can not get a USDA loan in cities or larger towns.

You also will need to show 2 years of consistent employment, and provide the necessary income documentation (2 years tax returns, and 2 recent pay stubs). USDA loans have income limits which means if you earn too much, you may not qualify.

Click here to find out if you qualify for a USDA loan

650 Credit Score Mortgage Lenders

Below is a list of some of the best mortgage lenders for borrowers that have a 650 credit score.  All of the following lenders offer conventional and FHA loans, and can help you determine what options might be available to you.  If you would like some assistance finding a lender, we can help match you with a lender that offers loan options to borrowers with a 650 credit score.  To speak with one of our loan officers, please fill out this form.

1.) New American Funding    Contact

2.) Finance of America    Contact

3.) Guaranteed Rate   Contact

4.) Supreme Lending   Contact

5.) Caliber Home Loans   Contact

6.) US Bank   Contact

7.) Flagstar Bank   Contact

8.) American Financial Network   Contact

9.) Freedom Mortgage   Contact

10.) Loan Depot   Contact

The lenders featured above all offer mortgage loans to borrowers with a 650 credit score.  However, not all of them will have the best options or terms. Click here to speak with someone who can help based upon your specific scenario

How Much of a Home Loan Can I Get with a 650 Credit Score?

A credit score of 650 will allow you to potentially qualify for any of the most common mortgage programs, but how much of a home loan you can get will be determined by your income and monthly obligations.

With a 650 credit score, you can qualify for a conventional loan, FHA, USDA, VA and even some of the nonprime or subprime mortgages. The key to how much of a home you can get with a 650 credit score will be based upon what your debt to income ratio is.

An FHA loan will allow for the highest debt to income ratio between all of the most common mortgage programs. The debt to income ratio is calculated by looking at your income, monthly payments on your credit report, and prevailing interest rates. This means you potentially could qualify for a higher home loan with an FHA loan than with other mortgage programs.

The first step in determining how much of a home loan you can get with a 650 credit score is to gather the documents needed for a loan officer to evaluate this for you. Recent copies of your pay stubs and last two months bank statements should be enough to help  make this determination.

The loan officer will use your gross monthly income, current market rates, and also the other monthly debts on our credit report to determine how much of a home loan you may qualify for. If you have an opportunity to reduce your other monthly payments such as car payments or credit card minimums, it will help you to qualify for a larger loan amount.

If you are unsure of how much home you can buy with a 650 credit score, then complete this short form and someone will help to figure it out for you.

Tips to Improve Your Credit Scores

There are many resources to help improve your credit scores. Below are just a few examples of what can be done.

Sign up for a credit monitoring service – There are some services that do a great job of monitoring your credit and credit scores. However, some of them like Credit Karma are not reflecting accurate mortgage scores. We can help you to find a good credit monitoring service that has worked well for our borrowers.

Credit Counseling – There are licensed credit repair professionals who offer credit counseling for a fee. Some do a great job of improving credit scores. If you would like to speak with a counselor, we can recommend one who has helped our homebuyers in the past.

Credit Utilization – One of the biggest credit tips that we can offer is to focus on reducing your credit utilization. The goal is to keep your consumer credit accounts (credit cards for example) at less than 30% of your credit limit for each account. For example, if your credit limit is $1000, then your balance should never exceed $300 at any point during your billing cycle. Each credit bureau will score differently based upon your credit utilization but all of the credit bureaus will improve your scores as the credit utilization decreases.

Frequently Asked Questions – 650 Credit Score Mortgage

Is 650 a Good Credit Score to Buy a House?
A 650 is an adequate score to buy a house because you should be able to qualify for a conventional, FHA, VA or USDA loan.

Can I get a jumbo loan with a 650 credit score?
The minimum credit score required to get a jumbo loan depends on the lender.   Most jumbo lenders require a borrower to have a credit score of at least 720.  However, there are several non-prime lenders that offers jumbo loans to borrowers with credit scores as low as 600.

How much of a home loan can I get with a 650 credit score?
The loan amount you can qualify with a 650 credit score is primarily decided by your gross monthly income and the amount of monthly debt which appears on your credit report. A credit score of 650 is high enough to where it will not impact how much of a loan you can get approved for.

Can I get a VA loan with a 650 credit score?
If you are eligible for a VA loan (which are exclusively for veterans), you may be able to qualify with a 650 credit score.

Will my interest rate be higher with a 650 credit score? Your interest rate will be higher vs if your scores were a lot higher. Lenders calculate the interest rate offered based upon credit scores, your down payment, and the type of loan you are applying for.

How can I improve my chances of getting approved for a mortgage with a 650 credit score? 
You can improve your chances of getting approved with a 650 credit score by having a larger down payment or a lower debt to income ratio.

How long will it take to improve my credit score to qualify for better mortgage options? 
The time it will take to improve your credit scores will vary or each person. If you need to challenge creditors or remove credit disputes, those can take time. If you have a lot of collections it could also take time to contact them or wait for the items to be removed from your credit report by each credit bureau.

Can i buy a house with a 650 credit score 
You can absolutely buy a house with a 650 credit score and you can apply for each type of mortgage if needed.

What if I have had a major credit issue in recent years?
If you have had a bankruptcy, foreclosure, or short sale, there are several non-prime lenders that offer home loans to borrowers even just 1 day after such events.

What do non-prime loans offer?
Non-prime loans provide an opportunity to get a mortgage for borrowers that do not qualify for conventional and FHA loans.  They have much less strict credit requirements, including no waiting periods after bankruptcies, foreclosures, and short sales.  Non-prime loans also are available to borrowers even with 650 credit scores.

Are there other credit requirements that I should know about?
Most mortgage lenders require that you have 3 trade-lines on your credit report. This can be auto loans, credit cards, personal loans, or other qualifying lines of credit. There can be exceptions to this rule, including alternative bills that are often allowed (phone bills, utilities, etc.).

What are the interest rates for a borrower with a 650 credit score?
The interest rate will depend on your individual qualifications, the mortgage lender, and the date you lock your interest rate. We can help connect you with a mortgage lender that offers free rate quotes.  To have a mortgage lender contact you, please fill out this form.

Is down payment assistance available to someone with a 650 credit score?
Yes, in fact many down payment assistance programs are available to borrowers with a 650 credit score.  The types of programs that exist include both local (city, county, or state level), and nationwide programs.  A mortgage lender can help you see if you qualify for down payment assistance.  If you have lower income, you are even more likely to qualify, as these programs are often intended for lower income households.

650 credit score mortgage

how much of a home loan can i get with a 650 credit score