• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Sonoma County Mortgages

Contact Us About Mortgage Financing

All financing provided by New American Funding

(707) 217-4000 | Prequalify Now

Search Sonoma County Mortgages

  • Home
  • Purchase
    • How Much Down Payment To Buy A Home?
    • How Much Income You Need To Buy A Home
    • How Much Should I Save For Buying A Home?
      • How Rates Affect Payment
    • No PMI Mortgages
    • FHA Loans
    • Sonoma County Disaster Loans
    • Jumbo Loans
  • Refinance
    • Mortgage Rates
    • Does It Make Sense To Refinance?
      • Get Your Refi Paperwork In Order
    • How To Pay Off Your Loan Faster
    • How To Remove PMI
    • How Lenders Price & Quote Loans
  • Loan Programs
  • Payment Calculator
    • Mortgage Affordability Calculator
  • Blog
  • Videos
  • About SCM
  • About Scott Sheldon

Primary Sidebar

Sonoma County Mortgages is a part of New American Funding

New American Funding - NMLS #6606

Get Your Latest Rate Quote Now!

What loan program you may be eligible for based on your credit score

March 12, 2019 by Scott Sheldon

Share on Facebook Share on Twitter Share on Pinterest Share on LinkedIn Share on Email
how the ppp loan may hurt your mortgage

Your credit plays an infinite role in your ability to get a mortgage loan. How good your credit stacks and what your credit history reveals may direct you into one program versus another. Here’s how your credit score drives what program you are eligible for.

It’s no secret getting a mortgage is a bureaucratic and very compliant government control process that requires adherence to dates time frames and eligibility. Contrary to popular belief there’s only two types of mortgages available in today’s mortgage environment; government-backed loans and government-insured loans. Government-backed loans including Fannie Mae and Freddie Mac (conventional mortgages) and government-insured loans include (FHA Loans, VA loans and USDA loans. Jumbo mortgages are also another mortgage type defined as any dollar amount over the maximum high balance loan limit in the area in which the property is located. For our purposes we’re going to be talking about government-backed and government-insured loans.

If your credit score is 700 or more and you have a 3 or a 5% down minimum payment a conventional loan might be the most suitable choice for for you so long as you’re sticking with a conforming loan which is $453,100. If your desired loan size exceeds this amount, you’ll start to need at least a minimum down payment of 5% with your 700 or higher credit score.

If your credit score is less than 700 you may need to start thinking about the possibility of getting a loan that is insured by the Federal Housing Administration which is more broadly known as FHA. FHA Loans contain a rather pricey form of PMI however the interest rates on FHA Loans are lower so it’s actually probable that you might be able to get an FHA loan with a lower payment less than a conventional loan even if your credit score is less than 700 as government-insured loans have better interest rates.

If your credit score is less than 680 you’ll need at least 20% down if you’re going to go with a conventional loan in most cases, but not all. Reason being is because conventional mortgages start to ding you on your credit score when you have a less than 680 credit score. FHA Loans do not have such a requirement at all.

If you have a very little down payment such as 3 or 5% down and your credit score is 640 or lower all the way down to 580 you almost automatically always need an FHA Loan. FHA Loans are far more lenient in terms of credit than conventional mortgages. The minimum credit score to get a conventional mortgage is 620 however that’s also going to mean paying a much higher interest rate and fees in the form of discount points.

Generally, speaking if you have 20% down or more and you have a 620 minimum credit score or more a conventional mortgage is most often the most practical choice. If you have less than 20% down such as 10% down, you’ll still want at least at 680 credit score or higher -anything less than a 680-credit score with less than 10% down also will almost always automatically point to an FHA Loan.

Other loans that we have not discussed much in are USDA loans and VA loans. USDA loans require no money down whatsoever, but also have income limitations and you can get such a loan with a 620-credit score with no money down.

VA loans do not require a down payment and will go as low 580 on the credit score to be eligible.

Mortgage tip: if your credit score is less than 580 some lenders on a case-by-case will do your loan.

If you’re looking to buy a house, work with a lender who can intricately navigate you through what program and payment and rate makes the most sense for you and your family financially going forward.

Looking to buy a house? Get a no cost quote now.

Related Mortgage Advice from Scott Sheldon

  • Does My Loan Type Hurt My Credit Score?

    Future favorable financing deals, low rates and preferred credit offerings all will be available depending…

  • What's the minimum credit score for getting an FHA mortgage?

    You will need to have a middle credit score of 620 or better for an…

  • Its Not Just Your Credit Score That Counts For Getting A Mortgage

    The credit and financial choices you make today shape your future chances of procuring credit.…

  • 10 Credit Score Loan Blunders Consumers Don't Know About

    Credit continues to be a hot topic. Having credit, maintaining credit and keeping the credit…

Filed Under: First Time Home Buyers, Interest Rates, Loan Programs, Loan Qualifying Tagged With: credit score mortgage, preapproval to buy a home, refinancing my mortgage, Santa Rosa mortgages, Sonoma County home loans, Sonoma County Mortgage Rates, sonoma county refinancing

Get Sonoma County Mortgages News and Updates in Your Inbox

Footer

SCM on Facebook

SonomaCountyMortgages.com

Connect on Facebook

SCM On Instagram

Follow Sonoma County Mortgages on Instagram

Follow on Instagram

SCM on Zillow

Zillow Reviews for Scott Sheldon, New American Funding

See Reviews on Zillow

Location & Contact

Sonoma County Mortgages and New American Funding are an Equal Opportunity Housing Lender

Scott Sheldon, Senior Loan Officer
NMLS ID# 287389
2455 Bennett Valley Road C107
Santa Rosa, CA 95405
1-707-217-4000
View SCM Map | Email Us!

Map of Sonoma County Mortgages New American Financing Office

View Map on Google

Copyright 2010–2023 SonomaCountyMortgages.com · About Us · Sonoma County Loans · Privacy Policy · Terms Of Use · Legal · Site Map

NMLS Consumer Access © New American Funding. All rights Reserved. NMLS ID#6606.
Corporate Office 14511 Myford Road, Suite 100, Tustin, CA 92780. We at New American Funding take great pride in our customer service and make it our number one priority. We encourage you to contact us for complaint resolution or any post-closing questions you may have regarding the servicing of your loan. We strive to have your experience with New American Funding a stellar one. In the rare case that our service did not meet your expectations, please call our customer care hotline at 1-800- 450-2010, ext. 7100 or you may contact us by email customerservice@nafinc.com. Please leave a detailed message and we will follow up with you no later than the end of the next business day. If you are using a screen reader or other auxiliary aid and are having problems using this website, please call 800-450-2010 Ext. 7100 for assistance.

State Licensing (Opens in New Window) | Privacy (Opens in New Window)
Terms of Use (Opens in New Window) | Electronic Consent Agreement (Opens in New Window)
Opens in new window Opens an external site Opens an external site in a new window