If you’re looking for a mortgage, having a credit score of 615 can make it more difficult to find a lender. Many lenders have a minimum credit score requirement of 620 or higher. However, there are still options available for those with a 615 credit score. In this article, we will discuss some mortgage lenders that may work with a credit score of 615.
What is a Credit Score?
A credit score is a number that represents your creditworthiness. It’s a three-digit number that ranges from 300 to 850. The higher your credit score, the more likely you are to be approved for credit and the better interest rates you’ll receive.
Your credit score is based on several factors, including your payment history, credit utilization, length of credit history, types of credit, and new credit. It’s important to monitor your credit score regularly to ensure that there are no errors or fraudulent activity.
Why is a Credit Score Important for Mortgages?
A credit score is an important factor that lenders consider when approving a mortgage. It’s a reflection of your ability to repay the loan on time and in full. A higher credit score indicates that you’re less of a risk to the lender, which means you may qualify for a lower interest rate and better terms.
On the other hand, a lower credit score may result in a higher interest rate and stricter loan requirements. Some lenders may require a larger down payment or a co-signer if your credit score is lower.
Mortgage Lenders for 615 Credit Scores
While many lenders have a minimum credit score requirement of 620 or higher, there are still some that may work with a credit score of 615. Here are some options to consider:
FHA Loans
The Federal Housing Administration (FHA) offers loans to borrowers with credit scores as low as 500. However, if your credit score is between 500 and 579, you’ll need to make a down payment of at least 10%. If your credit score is between 580 and 619, you’ll need to make a down payment of at least 3.5%. FHA loans are popular among first-time homebuyers and those with lower credit scores.
USDA Loans
The United States Department of Agriculture (USDA) offers loans to borrowers in rural areas who meet certain income and credit requirements. While there is no minimum credit score requirement, most lenders prefer a credit score of at least 640. However, some lenders may work with borrowers with a credit score of 615.
VA Loans
The Department of Veterans Affairs (VA) offers loans to veterans, active-duty service members, and their eligible spouses. While there is no minimum credit score requirement, most lenders prefer a credit score of at least 620. However, some lenders may work with borrowers with a credit score of 615.
Non-QM Loans
Non-qualified mortgage (Non-QM) loans are mortgages that don’t meet the criteria for a Qualified Mortgage (QM). These loans are intended for borrowers who may not meet the strict requirements of a QM loan, such as those with lower credit scores or irregular income. While these loans may have higher interest rates and fees, they can be a good option for those who don’t qualify for a traditional mortgage.
Improving Your Credit Score
If you have a credit score of 615, you may be able to qualify for a mortgage with certain lenders. However, improving your credit score can help you qualify for better terms and lower interest rates. Here are some tips for improving your credit score:
- Pay your bills on time
- Reduce your credit card balances
- Don’t close old credit accounts
- Don’t open new credit accounts
- Check your credit report for errors
Conclusion
A credit score of 615 may make it more difficult to find a mortgage lender, but there are still options available. FHA, USDA, and VA loans may work with a credit score of 615, as well as some non-QM lenders. Improving your credit score can help you qualify for better terms and lower interest rates. It’s important to shop around and compare offers from multiple lenders to find the best mortgage for your needs.
