Can You Get a Mortgage with a 650 Credit Score in 2023?
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. With a 650 score, 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.
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 match you with a mortgage lender that offers conventional loans in your location.
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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).
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). 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).
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 get matched with a mortgage lender with a 650 score, please fill out this form.
1.) New American Funding Contact
2.) Finance of America Contact
5.) Caliber Home Loans Contact
7.) Flagstar Bank Contact
8.) American Financial Network Contact
10.) Loan Depot Contact
The lenders featured above all offer mortgage loans to borrowers with a 650 credit score. If you would like some help finding a lender, we can match you with a lender that offers home loans in your location.
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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.
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.
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.