Ruth Peterkin/Getty Images
Your credit score carries a lot of weight when you’re applying for a mortgage. Not only does it help lenders determine whether or not they’ll offer you a loan, but it also influences the interest rate and terms of that loan.
With a score of 800, you’re in great shape credit-wise — in the highest possible credit score range. But how does it impact your homebuying journey? Is 800 a good credit score to buy a house? The short answer is yes, it is, and it can help you land the most competitive mortgage rates as well. Here’s what else to know about buying a house with an 800 credit score.
What credit score do you need to buy a house?
When lenders review your mortgage application, your credit score is one of the main factors they use to make a decision. Broadly speaking, the higher your score is, the more likely you are to get approved for a loan with a low interest rate and favorable terms.
You don’t need a score as high as 800 to buy a home (though it certainly helps). Some types of loans have no minimum credit score requirements, and FHA loans can be had with a score as low as 500 for qualified borrowers. But most homebuyers these days have scores much higher than that: According to data from the Federal Reserve Bank of New York, the median credit score for new mortgages in the fourth quarter of 2023 was 770.
What types of loans can I get with an 800 credit score?
Many types of mortgages do have minimum credit score requirements, but a score of 800 will put you above the minimum for just about everything. According to both the FICO and VantageScore models, an 800 lands you in the top tier in the range, meaning that you have “exceptional” or “excellent” credit. Here are the requirements for some of the most common loan types:
- Conventional loans: A credit score of 800 is well above the minimum needed to qualify for a conforming conventional loan, which is typically 620. In fact, with an 800, you ought to qualify for some of the best interest rates and terms available.
- FHA loans: First-time homebuyers and those looking for a mortgage with a low down payment often look to a loan from the Federal Housing Administration. The minimum credit score for these, if you qualify, is 500 with a 10 percent down payment and 580 with a 3.5 percent down payment.
- VA loans: To be eligible for a home loan from the U.S. Department of Veterans Affairs, you must be an active-duty military service member, veteran or surviving spouse. The VA doesn’t set credit score minimums, but lenders generally look for a score of 620 or higher.
- USDA loans: The U.S. Department of Agriculture’s loans are only available to low- and moderate-income buyers who purchase a home in a USDA-approved rural area. Typically, the credit score minimum is 640.
- Jumbo loans: Loans that exceed the conforming loan limits in your area have the highest credit score requirements — but even for these the minimum is usually a score of 700, so your 800 score is well above that.
How does having an 800 credit score impact how much house I can afford?
Your credit score directly influences how much house you can afford. When you have a higher score, you’ve proven that you are responsible with credit. As a result, lenders are likely to see you as a low-risk borrower and offer you lower mortgage rates. Lower rates mean lower monthly mortgage payments, which in turn means significant savings over the life of a loan.
Here’s an example: Let’s say you’re buying a $400,000 house with a 20 percent down payment, and your high credit score qualifies you for a 30-year fixed mortgage at an interest rate of 6.2 percent. According to Bankrate’s mortgage calculator, that would result in monthly principal and interest payments of $1,959. The exact same loan at a rate of 7.2 percent would bring that amount to $2,172 — that’s $213 more a month, $2,556 more a year, and a difference of more than $76,000 over 30 years.
Do I need to improve my credit score?
With an 800 credit score, you’re already in the highest possible range, meaning that you should get the best rates lenders are able to offer. Still, there are some ways to boost your score even higher and strengthen your mortgage application.
For one, you can focus on improving your debt-to-income ratio, or DTI. This metric compares your monthly debt obligations (including your housing payment, car loan, student loans and credit card payments) against your monthly income. Lenders use it to assess your ability to manage and repay debt, and the lower it is, the better. Reducing your DTI can be done by either paying down your debt or increasing your income.
If you aren’t in a rush to buy right away, you can also take some time to save for a bigger down payment. When you put down more money upfront, you need to borrow less, which reduces your monthly payments and lifetime interest. You might even get a better interest rate. Plus, if you’re able to put 20 percent down you won’t have to pay for private mortgage insurance, saving you even more money.
Next steps
With a credit score of 800, you’re in good shape to start shopping for a home. A local real estate agent who knows your local market well can guide you through the journey to find a home you love at a price you can afford. Interview a few candidates to find one you feel comfortable with, and ask questions to make sure your agent understands your budget, timeline and must-haves.
FAQs
Yes. An 800 credit score is considered “exceptional” by FICO and is in the highest tier of scores. As long as you meet the lenders’ other requirements, your score is high enough to qualify for just about any mortgage loan.
With today’s high interest rates and housing prices, it’s easy to understand why some folks are waiting to purchase a home. However, trying to time the market is risky. If you have a stable job, good credit and enough money for a sizable down payment and closing costs, it might make sense to buy now and start building equity. If rates decrease in the future, you can always refinance.
To get a general idea of how much you can afford to spend on a home, look to the 28/36 rule. This common rule of thumb dictates that you shouldn’t put more than 28 percent of your gross monthly income toward housing, or more than 36 percent on all of your debt (including housing).
