My daughter followed in my footsteps and became a realtor, however buying a home today (or obtaining a mortgage), has changed radically since my career began. During the real estate boom obtaining a home mortgage was something most upstanding young couples could do, regardless of credit history. Today things have changed and to be considered for a home loan, you must have minimum credit score or most lenders won’t consider your application.

At least one factor for this change is based on the economy and the over extension of credit given by home mortgage lenders. When the housing market took a downturn and foreclosures became commonplace, lenders began overcompensating requiring higher credit scores difficult for many to meet, and 100% financing has nearly become a thing of the past.

If your credit score is below 640 you’ll find it difficult to find a lender who will seriously consider your loan application, since most are looking for those with high credit score, verifiable “proof of income”, as well as adequate funds for a good down payment.

Most loan officers are good people confined by the rules placed on them by their own financial institutions; however if you talk one-on-one explaining your situation, perhaps asking them for advice on improving your credit score, when you do this, you’re building a relationship with the lender for the future.

While identity theft is not the subject of this article, it is certainly a wise to contact the three major credit bureaus, (Experian, Equifax, and TransUnion) and obtain up-to-date credit reports, ensuring their accuracy and knowing in advance what the lender will being seeing when considering the minimum credit score for home loans.

While there are many reasons a person may fall behind in their debts (some beyond our ability to avoid), if at all possible bring any of your outstanding bills up-to-date prior to making your loan application, this will show the lender you’re serious, even if you don’t qualify today.

For most young couples buying a home is probably the most important and largest financial obligation of your life, based on that it’s wise to plan out your strategy ahead of time. Here are a few steps to help in your journey to obtaining the minimum credit score for required for home loans.

Check your credit score at least once a year for accuracy

Learn to live on a budget, and do so diligently.

Do not let the beginnings of good credit, be an excuse to splurge.

When you do apply for a home loan, make certain you research different lenders, realizing there are factors besides your credit score that may affect the loan.

Realize there is a difference between being pre-qualified and pre-approved. Pre-qualified simply means you are someone likely to be considered for a loan, being pre-approved means you are assured of your loan, and can house shop knowing the money is available.

Once you’ve reached your goal of obtaining the minimum credit score for home loans, pat yourself on the back, but don’t stray from the path of sound judgment and living within your means.

By diligently applying the above steps, you will no longer be concerned about the minimum credit score for home loans, since your score will be well above the required 640.

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One of the most important factors in buying a new home is your credit score and debt to income ratio