Utah Credit Score Requirements to Buy a House
Are you wondering what the credit score is needed to buy a house in 2020? Whether you’re looking for FHA loans in Utah, if you’re wondering what the minimum credit score for first time home buyers, what the FHA credit score requirements for 2020, minimum downpayment required to buy a house, or curious what the Coronavirus did to lending than this video is for you!
Video Transcript:
When it comes time to buy a house, don’t let this mistake stop you from getting a mortgage or even cost you thousands of dollars if you do get a mortgage. Hey everybody, it’s Melissa Ballman with Berkshire Hathaway HomeServices Utah Properties and Utah Homes by Melissa. Today we’re going to talk mortgages. There’s a lot of noise going on that due to COVID-19 or coronavirus, lending laws have changed and made it so difficult for buyers to get a home loan, but that’s not actually the case. Make sure that you stay tuned because I’m going to share with you one thing that can save you thousands of dollars when it comes time to getting a mortgage for a home loan. If you haven’t already, make sure you subscribe to my channel so you get alerted of my new videos that are posted each week.
A big lender, JP Morgan and Chase, or Chase as you know it, has announced that they are changing the requirements for new borrowers. This does not affect any of their existing mortgage clients. New borrowers, majority of them, with Chase is going to require a minimum credit score of 700 and a 20%-down loan payment. That is huge, because if you’re a first-time home buyer, most people don’t have 20% down for their first home. Don’t just walk into a bank and think, “They told me 700 credit score and 20% down. “I can’t buy a house now.” Because here in Utah, I work with some amazing lenders. They are still doing loans that are doable, especially for first-time home buyers. The biggest change here in Utah with the lenders that I work with is USDA, FHA, and VA loans. At one point, those loans, they would go as low as 580 for a credit score, at least with one lender that I work with. They’ve now bumped that up, so the minimum credit score right now is 620, but that would allow you a 3 1/2%-down payment, which is way better than a 20%-down, especially if you’re a first-time home buyer. We also have an amazing program available for first-time home buyers in Utah under Utah Housing. That loan program allows you to do zero down, and your minimum credit score on that is 660 now. Definitely, some of those thresholds have gone up, but not unreachable. A 700 credit score, if you’ve had any credit problems before, can seem daunting and discouraging, but rest assured, there are other programs as long as, and this is my number-one tip I tell all buyers, shop around. I can’t stress this enough to buyers. Don’t think of real estate as, “My aunt Betty Sue does loans,” or, “My friend’s brother does loans,” or, “My cousin knows a guy,” or anything like that. At the end of the day, you wanna do something that is going to save you money and not cost you extra money because you used a friend of a friend. Shop around. That’s my number-one tip for all buyers that I work with, is shop around. Do not just walk into a bank or a credit union and say, “Boom, this is it.” Or if you just go to one lender because your sister referred you or your cousin referred you. That step, just to give you an idea, lenders charge different rates and different fees. Those fees can really add up to thousands of dollars depending on what your purchase price is. Typically speaking, if you’re shopping for a home loan and you’re going through that pre-qualification phase, as long as you talk to many lenders or at least a handful of lenders within 30 days, it’s going to count as one inquiry. It’s not gonna count as one, two, three, four, five different lenders just that I’m talking to ran my credit. Make sure you check with the lender to make sure those rules still apply from the time that I filmed this, but shop around. I know I keep saying that, but I can’t stress it enough, okay? If you want some amazing lenders that I work with, feel free to reach out to me. I’m happy to share their information. If you have less than perfect credit, you may be constrained to less than ideal lending conditions or need to do some credit repair. That’s fine, everybody’s in that boat at one point or another when times are tough like they are right now with COVID-19. If you are a first-time home buyer or you’re looking to buy, make sure you check out my other videos on steps before you purchase a home. Have a great day, and if you have any real estate-related questions, feel free to reach out.