Can You Get a Mortgage with a 604 Credit Score?
Many prospective home buyers assume that your credit must be in the 600s or 700s to get a mortgage. This is certainly not the case, as many mortgage lenders offer home loans to borrowers with credit scores as low as a 500.
FHA Loan with 604 Credit Score
The most common type of loan available to borrowers with a 604 credit score is an FHA loan. FHA loans only require that you have a 500 credit score, so with a 604 FICO, you will definitely meet the credit score requirements.
Other FHA loan requirements are that you have at least 2 years of employment, which you will be required to provide 2 years of tax returns, and your 2 most recent pay stubs. The maximum debt-to-income ratio is 43% (unless you have satisfactory “compensating factors”, such as a higher down payment, or cash reserves).
Something that attracts many borrowers to FHA loans is that the minimum down payment requirement is only 3.5%. This money can also be borrowed, gifted, or provided through a down payment assistance program.
Would you like to see if you qualify for an FHA loan? We can help match you with a mortgage lender that offers FHA loans in your location.
USDA Loan with 604 Credit Score
The minimum credit score requirement for a USDA loan is now a 640 (for an automated approval). Fortunately, you can still get approved for a USDA loan with a 604 credit score, but it will require a manual approval by an underwriter. In order to get approved with a 604 credit score, expect to have strong “compensating factors”, such as conservative use of credit, 2 months mortgage payments in cash reserves (savings), a low debt-to-income ratio, and/or long job history.
Other requirements for USDA loans are that you purchase a property in an eligible area. USDA loans are only available in rural areas, which includes the outer areas of major cities. You can not get a USDA loan in cities or larger towns (with a population over 30,000 people).
You also will need to show 2 years of consistent employment, and provide the necessary income documentation (2 years tax returns, and 2 recent pay stubs).
604 Credit Score Mortgage Lenders
Below is a list of some of the best mortgage lenders for borrowers that have a 604 credit score. All of the following lenders offer conventional and FHA loans, and can help you determine what options might be available to you. If you would like some assistance finding a lender, we can help match you with a lender that offers loan options to borrowers with a 604 credit score. To get matched with a mortgage lender, please fill out this form.
3.) Guaranteed Rate
4.) Supreme Lending
6.) US Bank
7.) Flagstar Bank
9.) Freedom Mortgage
10.) Loan Depot
The lenders featured above all offer mortgage loans to borrowers with a 604 credit score. If you would like some help finding a lender, we can match you with a lender that offers home loans in your location.
Frequently Asked Questions
Can I get a conventional loan with a 604 credit score?
The minimum credit score required to get a conventional loan is 620. Therefore, you would need to wait until your credit score has increased by at least 16 points before you would be eligible for a conventional loan.
Can I get a VA loan with a 604 credit score?
If you are eligible for a VA loan (which are exclusively for veterans), you may be able to qualify with a 604 credit score.
What if I have had a major credit issue in recent years?
If you have had a bankruptcy, foreclosure, or short sale, there are several lenders that offer non-prime loans to borrowers even just 1 day after such events.
What do non-prime loans offer?
Non-prime loans provide an opportunity to get a mortgage for borrowers that do not qualify for conventional and FHA loans. They have much less strict credit requirements, including no waiting periods after bankruptcies, foreclosures, and short sales. Non-prime loans also are available to borrowers with credit scores as low as 500 (or even below 500).
Are there other credit requirements that I should know about?
Most mortgage lenders require that you have 3 trade-lines on your credit report. This can be auto loans, credit cards, personal loans, or other qualifying lines of credit. There can be exceptions to this rule, including alternative bills that are often allowed (phone bills, utilities, etc.).
What are the interest rates for a borrower with a 604 credit score?
The interest rate will depend on type of mortgage program, your individual qualifications, the mortgage lender, and the date you lock your interest rate. We can help connect you with a mortgage lender that offers free rate quotes. To have a mortgage lender contact you, please fill out this form.
Is down payment assistance available to someone with a 604 credit score?
Yes, in fact many down payment assistance programs are available to borrowers with a 604 credit score. The types of programs that exist include both local (city, county, or state level), and nationwide programs. A mortgage lender can help you see if you qualify for down payment assistance. If you have lower income, you are even more likely to qualify, as these programs are often intended for lower income households.