580 Credit Score Mortgage Options
A credit score of 580-619 will open up some options to purchase a home through various mortgage programs offered by a select group of lenders.
Your credit score plays a significant role in your ability to qualify for a mortgage and the rate also is what lenders use to determine what your interest rate will be.
Having scores that are too low also may prevent you from qualifying for a mortgage. For example, conventional loans require credit scores of at least 620. Therefore, if your scores are currently anywhere from 580-619, a conventional loan is not going to be an option for you.
If you have a credit score of 580-619 you may qualify for a VA, FHA, USDA and bank statement loans for self employed borrowers. Keep in mind that most lenders will not work with borrowers who have scores under 620. However, we are able to help you to purchase a home even with lower credit scores at a competitive rate.
Below are some mortgage options for home buyers with credit scores between 580 and 619. If your scores drop below 580 when you apply for a mortgage, your loan officer will share what options you have, or will work with you to improve your scores.
FHA Loan Requirements With a 580-619 Credit Score
FHA loans are the most popular mortgage program for individuals with lower scores. This will likely be your best option if your credit scores are 580 or higher.
- FHA loans are often used by first time home buyers but are available to anyone who can meet the criteria
- Recent changes to the FHA guidelines now require mortgage insurance for the life of the loan
- Each applicant must have a 2 year work history
- Each applicant also must be able to fully document their income with pay stubs, W2s and tax returns.
- FHA loans have a down payment requirement of 3.5% for scores between 580-619
Conventional Loan Requirements With a 580-619 Credit Score
Conventional loans are not available with scores between 580-619. However, if you are close then your loan officer can work with you to raise your scores to qualify. This is what you can expect with a conventional loan if you are able to get your scores to over 620:
- A down payment of at least 5% of the purchase price.
- Document your income using W2s and tax returns
- PMI will be required if the down payment is less than 20% down
- Conventional loans can be used for 1-4 unit properties
- Minimum of a 2 year work history required but exceptions can be made
- Cosigners are permitted to help you to qualify
VA Loan Requirements With a 580-619 Credit Score
VA loans are for veterans, active military, or their spouses. This is a great program if you can meet the qualifications.
- You will need to have VA eligibility
- Income and assets must be fully documented
- There will be a VA funding fee requirement
- VA loans have no down payment unless your credit scores are very poor
- Credit scores of 580-619 are acceptable but many lenders will ask for higher scores.
USDA Loan Requirements with a 580-619 Credit Score
USDA loans are for the purchase of a primary residence in a USDA designated rural area.
- You must fully document your income and assets
- USDA loans do not require a down payment
- USDA guidelines will allow for scores higher than 580-619.
- The property fall within a USDA eligible location.
- You must have a two year work history
Read more about USDA loans
We have been helping people to purchase their dream home for more than 20 years regardless of credit score. Please let us help you by having a free consultation so we can walk through your personal scenario. Click here to get connected with us.
Frequently Asked Questions – 580-619 Credit Score Mortgage Lenders
Q: Can I get a mortgage with a 580 credit score?
A: There are options to qualify for a mortgage with credit scores as low as 580.
Q: Which lenders offer mortgages with a 580 credit score?
A: There are a handful of lenders who will help with a 580 credit score but the list of lenders is constantly changing. Contact us directly and we can help you with a 580 credit score.
Q: What are the interest rates when you have a 580 credit score?
A: Lenders place a lot of weight on credit scores when determining what the interest rate will be. With a credit score of 580, you can expect the rate offered to be higher than if your credit scored were 640 for example. Contact us to get a quote.
Q: What is the minimum credit score needed to get a loan?
A: The lowest credit score to where you can qualify for any type of mortgage is 500.
Q: How easy is it to raise my credit score?
A: Improving your credit scores are not difficult but it takes dedication and time. A good loan officer can help point you in the right direction.