How Much A Home Loan Can I Get 650 Credit Score?

How Much A Home Loan Can I Get 650 Credit Score? Securing a home loan is a significant step towards fulfilling the dream of homeownership. However, for many potential homebuyers, the process can be daunting, especially if they have a credit score that falls below the ideal range. One such credit score range is 650, which can raise questions about the feasibility of obtaining a mortgage and the amount one can borrow. This article aims to shed light on the possibilities of securing a home loan with a 650 credit score.

How Much A Home Loan Can I Get 650 Credit Score?

Understanding a 650 Credit Score:

A credit score of 650 is generally considered to be in the fair credit category. While it is not the highest score possible, it is also not the lowest. Lenders use credit scores to assess a borrower’s creditworthiness, and a 650 credit score might indicate a somewhat riskier borrower compared to someone with an excellent or good credit score. However, it’s essential to remember that credit scores are just one factor considered by lenders when evaluating a mortgage application.

Impact on Loan Eligibility:

A 650 credit score can affect your eligibility for a home loan, but it doesn’t necessarily disqualify you. Many lenders offer mortgages to borrowers with credit scores in this range, albeit with some potential trade-offs. For instance, a lower credit score might result in a higher interest rate, which could increase the overall cost of the loan.

Loan-to-Value Ratio (LTV):

One critical factor that lenders consider when approving a mortgage is the Loan-to-Value (LTV) ratio. The LTV ratio represents the percentage of the home’s value that you’re borrowing. Generally, lenders prefer borrowers with lower LTV ratios, as it reduces the lender’s risk. With a credit score of 650, you might face some limitations on the maximum LTV ratio you can secure. This means you may need to make a larger down payment to compensate for the perceived risk.

Maximum Loan Amount:

Determining the maximum loan amount with a 650 credit score depends on various factors, such as your income, debt-to-income ratio (DTI), and the lender’s specific guidelines. In general, lenders often cap the total monthly housing expense, including mortgage payments, insurance, and taxes, at around 28% to 31% of your gross monthly income. Additionally, the DTI ratio, which includes all your monthly debt payments relative to your income, usually should not exceed 43% to 50%.

Tips to Improve Loan Options:

While a 650 credit score might present some challenges, you can take steps to improve your loan options:

1. Pay Down Debts: Reducing outstanding debts can positively impact your credit score and DTI ratio, making you more attractive to lenders.

2. Save for a Higher Down Payment: A larger down payment can improve your LTV ratio and demonstrate financial responsibility to lenders.

3. Shop Around: Different lenders have varying criteria for home loan approvals. It’s essential to explore multiple options to find the best terms available to you.


A credit score of 650 might not be ideal for securing a home loan with the most favorable terms, but it doesn’t mean you’re ineligible for a mortgage. With careful financial planning, responsible borrowing, and a bit of patience, you can improve your creditworthiness over time. Remember, buying a home is a significant investment, and it’s crucial to choose a loan that fits your financial situation comfortably. Consulting with a financial advisor or mortgage specialist can provide personalized guidance to help you navigate the home-buying process successfully.

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