Can I Buy a Home With a 700 Credit Score?
A 700 credit score is a solid starting point for homebuyers, offering a range of loan options. While it’s not the top-tier score, it’s good enough to get you a good rate on conventional, FHA, VA, and USDA loans.
The higher your credit score, the better your mortgage terms, so it’s worth understanding how your score affects your options.
If you’re ready to buy, Rate’s Same Day Mortgage can help streamline your home-buying process, getting you pre-approved quickly.
Is a 700 Credit Score a Good Score?
Yes, a 700 credit score is considered good by mortgage lenders and qualifies you for various home loan options.
It indicates responsible credit history and puts you in a favorable position for conventional, FHA, VA, and USDA loans. However, it’s not the highest score, and improving it could get you even better interest rates and lower payments.
Pros and Cons of Getting a Home Loan with a 700 Credit Score
A 700 credit score opens up plenty of opportunities in the mortgage world, but it’s not without its ups and downs. Let’s break it down:
Pros:
- Qualifies you for great mortgage options with favorable terms
- Considered “good” by all major credit bureaus like Experian, Equifax, and TransUnion
- Smoother mortgage application process due to solid credit standing
Cons:
- Might not qualify for the absolute lowest interest rates (740+ FICO score typically needed)
- Slightly higher interest rate compared to top-tier borrowers
- Larger down payment might still be needed to secure the best terms
How Does a 700 Credit Score Impact How Much House I Can Afford?
When you have a 700 credit score, mortgage lenders see you as a fairly reliable borrower. While you’re not at the top of the scale, you’re still above average.
A 700 is an average credit score rating, meaning you’re likely to qualify for good loan terms, but how much house you can afford will depend on a few key factors.
How Big of a Loan Can I Get with a 700 Credit Score?
A 700 credit score will likely get you approved for a considerable mortgage loan, but other factors will influence how much you can borrow.
Lenders will look at your income, debts (including student loans), and the types of credit you manage.
Strong finances and a low debt-to-income ratio can help you secure a bigger loan.
Factors That Influence How Much You Can Borrow
With a 700 credit score, your gross monthly income, debt-to-income ratio (DTI), and current debt play crucial roles in determining your borrowing capacity.
Mortgage lenders will analyze your credit history, payment history, credit utilization, and DTI to assess how comfortably you can afford monthly payments without overextending yourself.
These factors collectively impact the maximum mortgage loan amount you can qualify for and the loan terms you’ll receive.
Interest Rates for a 700 Credit Score
Interest rates are heavily influenced by your credit score. A higher credit score helps you secure a lower interest rate, which reduces your monthly mortgage payment and long-term costs.
While a 700 score might not get you the lowest rate available, it’s still good enough to get competitive mortgage rates from many lenders.
To boost your chances of getting a lower interest rate, focus on maintaining a solid credit history and avoiding late payments.
How Much Could You Save with a Higher Score?
If you’re able to raise your credit score to 740 or higher, you could qualify for an even better interest rate.
A lower rate could save you thousands of dollars over the life of your loan, making it worthwhile to improve your score by paying down credit card balances or limiting new credit applications before applying.*
Should You Improve Your Credit Score Before Buying?
While a 700 credit score is good, it may be worth waiting a bit longer and improving your score to qualify for better rates. Consider reviewing your credit report and focusing on making timely payments to boost your score before applying for a mortgage loan.
How Credit Score Affects the Debt-to-Income Ratio
Your DTI ratio shows lenders how much of your income goes toward paying off debts. Even with a 700 credit score, your DTI can still impact your loan amount and the type of loan you qualify for.
A lower DTI ratio means you have less existing debt, which could help you qualify for a higher loan amount or better terms, making your real estate purchase more affordable.
Which Types of Home Loans Are Available for a 700 Credit Score?
With a 700 credit score, you have several mortgage options, from government-backed loans to conventional mortgages. Each type of mortgage has its own set of benefits and minimum credit score requirements.
FHA Loans
FHA loans, backed by the Federal Housing Administration, are often recommended for borrowers with lower credit scores.
While a 700 credit score may not make FHA your first choice, it could still be a good option if you have a high DTI or need flexibility in loan terms. FHA loans are often ideal for those with a less established credit history.
FHA Loan Requirements
Typically, FHA loans require a minimum credit score of 580. With a 700 score, you’ll likely qualify for a lower down payment and more favorable loan terms.
However, it’s important to consider how your credit utilization and payment history impact your eligibility.
FHA vs. Conventional Loans
FHA loans come with more relaxed credit requirements than conventional loans. However, if you have a 700 score, you may want to consider a conventional mortgage, as it could offer you a lower interest rate and less expensive mortgage insurance.
Conventional loans are typically preferred for borrowers with a higher credit limit and strong creditworthiness.
USDA Loans
USDA loans are intended for low-to-moderate-income borrowers purchasing homes in rural or suburban areas. These loans don’t require a down payment, making them attractive to many first-time homebuyers.
The U.S. Department of Agriculture guarantees these loans, offering lower interest rates and more lenient qualifying terms for those who meet specific income requirements.
Income and Property Location Requirements for USDA Loans
To qualify for a USDA loan, you’ll need to meet certain income limits based on your area, and the property must be located in a USDA-eligible rural area.
If you meet these requirements and have a good credit history, you’ll likely get favorable loan terms.
VA Loans
VA loans, backed by the Department of Veterans Affairs, offer fantastic benefits to eligible veterans, active-duty service members, and their families.
With a 700 credit score, you’ll likely receive excellent loan terms, including no down payment requirements and no mortgage insurance. VA loans also consider factors like payment history and credit utilization in the approval process.
Additional Benefits of VA Loans for a 700 Credit Score
A VA loan can be especially beneficial if you have a good credit score, as it can help you qualify for a lower interest rate, reducing your monthly mortgage payments and overall loan cost.
If you’re considering a refinance option in the future, having a good credit score will further improve your terms.
No-Mortgage-Insurance Loans
Portfolio loans and other no-mortgage-insurance options are available to borrowers with strong credit. With a 700 score, you might qualify for loans that don’t require private mortgage insurance (PMI), even with a smaller down payment.
These types of loans could include jumbo loans for higher-priced properties, where mortgage insurance is often waived if your creditworthiness is high enough.
Can I Get a Conventional Loan with a 700 Credit Score?
Absolutely! A conventional loan is often a good fit for borrowers with a 700 credit score. Conventional loans typically require a minimum credit score of 620, so you’re well above that threshold.
This puts you in a favorable position, especially since most mortgage lenders consider a 700 score to be a solid indicator of creditworthiness.
While you may not have "excellent credit," a 700 credit score still falls within the “good” range, giving you access to competitive mortgage rates and terms.
Requirements for a Conventional Loan
You’ll need to meet specific income and credit requirements, but a 700 score should make the qualifying process smoother.
Conventional loans are backed by Fannie Mae and Freddie Mac, which use their own scoring models, including FICO and VantageScore, to determine creditworthiness.
With a good credit score, you can secure a lower interest rate compared to FHA loans, which often cater to borrowers with low credit scores or bad credit.
How Much Down Payment Is Required?
A conventional loan usually requires a down payment of at least 5% of the home’s purchase price.
However, if you can put down 20%, you’ll avoid paying Private Mortgage Insurance (PMI), significantly lowering your monthly payments.
This option is ideal for borrowers with available credit and solid personal finance habits, as it reduces long-term costs and closing costs.
What Credit Score is Needed to Buy a House with No Money Down?
If you’re hoping to buy a home with no money down, VA loans and USDA loans are the best options.
These government-backed loans have flexible credit requirements, and with a 700 credit score, you’re well-positioned to qualify without needing a down payment.
What Credit Score Do You Need to Buy a $600,000 House?
To buy a $600,000 house, a 700 credit score is often enough. However, lenders will also assess your income, debts, and overall financial health.
A strong credit score range of 700+ shows lenders you’re a responsible borrower, but improving it further could help secure better rates and terms for a loan of this size.
What is the Minimum Down Payment for a 700 Credit Score?
Typically, borrowers with a 700 credit score need a down payment of at least 5% for a conventional loan.
If you can afford a 20% down payment, you’ll avoid private mortgage insurance (PMI), which lowers your monthly costs. A solid FICO score also helps secure better loan terms with a lower down payment.
Interest Rates and Private Mortgage Insurance (PMI)
A good credit score of 700 can help you secure a lower PMI rate. Your PMI costs depend on factors like your credit score, loan amount, and down payment.
While PMI is typically required for conventional loans with less than 20% down, borrowers with excellent credit scores might be able to get better terms.
If you’re considering refinancing or taking out personal loans for home improvements, your credit score and credit accounts play a big role in determining the interest rates you’ll receive.
How Can I Get Pre-Approved for a Home Loan?
With a 700 credit score, you’re in a solid position to explore various mortgage options.
Whether you’re considering a conventional loan or government-backed loans like FHA, USDA, or VA, your score allows you to access favorable loan terms and competitive interest rates.
Now that you have a clearer idea of how your credit score affects your mortgage eligibility, why not fast-track your journey to homeownership?
Check out our Same Day Mortgage for a quick, hassle-free pre-approval process. It’s your gateway to the most suitable rates and a smoother, faster home-buying experience—so you can confidently take the next step today!
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Guaranteed Rate, Inc. does not provide credit counseling or credit repair services.
*Savings, if any, vary based on the consumer’s credit profile, interest rate availability, and other factors. Contact Guaranteed Rate, Inc. for current rates. Restrictions apply.