The Credit Score Myth That’s Stopping South Jersey Homebuyers
Many would-be homebuyers in South Jersey aren’t sitting on the sidelines because they don’t want to buy. They’re waiting because they think they can’t qualify. Often, their credit score concerns hold them back.
A recent Bankrate survey revealed that 42% of Americans believe you need excellent credit to qualify for a mortgage. This belief shows up frequently when I talk to renters, from Cherry Hill to Williamstown. They often tell me, “my credit isn’t good enough yet.”
Maybe you feel the same way. You check your score, see it’s not perfect, and think buying a home isn’t possible right now.
But here’s what you should know about buying in our area.
Despite what many people believe, you don’t need flawless credit to buy a home in South Jersey.
Perfect Credit Isn’t Required for South Jersey Homebuyers
Where does this myth come from? Part of the confusion is that the typical buyer today does have strong credit. According to data from the NY Fed, the median credit score for all buyers is 775.
But that doesn’t mean your score needs to be that high to qualify.
Looking at recent buyers in our market, many got mortgages with lower scores. The data shows 10% of buyers had scores around 660. This means some scores were higher and some lower, but the median in that bottom 10th percentile hovered around that range (see graph below):
So even if your score isn’t as high as you’d like, that doesn’t close the door on buying. FICO explains there isn’t one magic number you absolutely need when buying a home:
“While many lenders use credit scores like FICO Scores to help them make lending decisions, each lender has its own strategy, including the level of risk it finds acceptable. There is no single ‘cutoff score’ used by all lenders, and there are many additional factors that lenders may use . . .“
The best step is talking to a local South Jersey lender to see what’s possible for you. Many buyers in Sewell and Mount Laurel purchase homes with scores in the 600s – and you might be able to as well.
Bottom Line
Your credit score matters in the home buying process. But it doesn’t need to be perfect.
If credit concerns have kept you waiting to buy in South Jersey, it’s time to explore your options. For help understanding where you stand and what steps to take next, connect with a local lender who knows our market.
You don’t need everything figured out to start the conversation about your first home purchase.
