Q: I have never bought a home before and I have been working on my credit I was wondering what is the standard credit score you need to have before applying for a new home loan?

Thanks, Jennifer

A: Dear Jennifer:

As a general rule, Fannie Mae lenders require a 620 or better credit score for approval. This rule is only a guideline and lenders who use automated electronic underwriting results may vary depending on other factors in your application. Other factors to consider are past credit history, percentage of your down-payment, and cash reserves. Another option to consider is a FHA loan. HUD created the FHA program to increase homeownership in the United States. While you need to pay most of your bills on time, FHA does not have a credit score minimum and they do not require that you have an established credit history. If you have been paying your rent on time or have verifiable alternative credit (utilities, cel phone, etc.) you may qualify for a FHA financing. Another good reason to apply for a FHA loan is that they are very liberal on their down-payment requirements. You can buy a home for as little as a 3% down-payment which can come entirely as a gift from a relative. Even if you do not have the resources for the 3% down we can place you in a charitable program that will pay the 3% for you. If we can be of further assistance to you don't hesitate to call us at 314.787.2900 or www.midwestmortgagecapital.com

Jerry