What Credit Score Mortgage Lenders Want

Blog
June 16, 2026

A $400,000 mortgage at 6.75% instead of 7.25% saves about $135 per month in principal and interest – roughly $8,100 over five years. Credit score can be one reason that pricing gap shows up. So when buyers ask what credit score mortgage lenders want, the practical answer is not one number. It depends on the loan program, down payment, debt ratios, reserves, and the property itself.

By Duane Buziak, Mortgage Maestro, NMLS#1110647

Table of Contents

What credit score mortgage lenders want
Minimum scores by loan type
How score affects payment and cash to close
Local Glen Allen and Henrico market context
Broker vs lender comparison
5-step roadmap before you apply
FAQ

What credit score mortgage lenders want

For many borrowers around Glen Allen, Short Pump, and Innsbrook, the real threshold is not simply whether a loan can be approved. It is whether the score is strong enough to keep the rate, mortgage insurance, and reserves from becoming unnecessarily expensive.

Conventional loans commonly start at 620. FHA loans can go lower in some cases, often 580 with 3.5% down, though lender overlays may apply. VA and USDA do not publish one universal statutory minimum in the same way consumers often expect, but many lenders set internal floors, frequently around 580 to 620. Jumbo and non-QM programs usually want more score strength because the risk profile is different, and reserve requirements can be much heavier.

That is why the better question is what credit score mortgage approval and pricing look like for your scenario. A 620 score with 25% down on a low-DTI file may be workable. A 680 score with high utilization, recent late payments, and limited reserves may still price worse than expected.

Minimum scores by loan type

The table below shows common starting points. These are market norms, not guarantees, and overlays change by lender and loan file.

| Loan type | Common minimum score | Typical down payment | Reserve expectation | Notes | |—|—:|—:|—:|—| | Conventional conforming | 620 | 3%-5%+ | 0-6 months | Better pricing usually starts higher than 620 | | FHA | 580 | 3.5% | 0-2 months | Some files can be manually underwritten | | VA | 580-620 common lender floor | 0% | 0-2 months | No monthly MI, but score still affects pricing | | USDA | 640 often favored for streamlined approval | 0% | 0-2 months | Property and income rules apply | | Jumbo | 680-720+ | 10%-20%+ | 6-12 months common | Stronger score and assets matter | | DSCR / bank statement / non-QM | 620-700+ | 10%-20%+ | 3-12 months common | Program-specific underwriting |

For 2025, the baseline conforming loan limit in most areas is $806,500, while higher-cost limits can exceed that in designated areas, according to Fannie Mae at https://www.fanniemae.com and the CFPB at https://www.consumerfinance.gov. In much of the Richmond-area market, that standard conforming cap is the relevant benchmark for a large share of primary residence purchases.

How score affects payment and cash to close

A credit score does two things at once. First, it affects whether you qualify. Second, and often more important, it affects pricing. That means the same house in Wyndham or near Twin Hickory can produce meaningfully different monthly payments depending on score band.

| Score band | Likely impact on financing | $400,000 loan payment example* | 5-year payment difference vs best band | |—|—|—:|—:| | 760+ | Strongest pricing options | $2,595 | $0 | | 720-759 | Slightly higher pricing possible | $2,635 | About $2,400 | | 680-719 | Noticeable pricing changes | $2,704 | About $6,540 | | 640-679 | Sharper hit to rate or MI | $2,808 | About $12,780 | | 620-639 | Approval may still work, but cost rises | $2,915 | About $19,200 |

*Illustrative principal and interest only, assuming 30-year fixed examples with progressively higher rates. Taxes, insurance, HOA dues, and mortgage insurance are not included.

Closing costs also matter. In this market, many purchase borrowers will see lender fees, title charges, prepaid taxes and insurance, and escrows bring total closing costs into roughly the 2% to 5% range, depending on price, credits, and escrows. A lower score can reduce lender credit options and increase the cash needed to close.

Local Glen Allen and Henrico market context

Henrico County remains competitive in many price bands, especially for well-kept homes with easy access to I-64, I-295, and the Deep Run and Short Pump corridors. In tighter inventory conditions, sellers often prefer buyers who look clean on paper, and that includes stronger credit. Even when two offers have the same price, the one with clearer financing may feel safer.

County-level price data also helps frame expectations. Zillow reports a typical home value in Henrico County in the mid-$390,000 range, though neighborhood-level pricing varies substantially between areas such as Glen Allen, Lakeside, and western Henrico near Short Pump. See https://www.zillow.com/home-values. In practice, that means many local borrowers are shopping in a range where a small rate difference can have a real monthly impact.

This is also where early screening matters. A soft credit pull mortgage review can help estimate eligibility without the initial impact of a hard inquiry. Borrowers often search phrases like no hard inquiry mortgage pre approval, mortgage pre approval without hard pull, soft pull mortgage broker, and no credit hit mortgage application because they want to understand options before committing to a full file. Soft-pull prequalification can be useful for planning, but a full approval usually still requires full documentation and, in many cases, a hard inquiry later in the process.

Broker vs lender comparison

Credit overlays vary. That is one reason borrowers compare brokers and direct lenders rather than assuming every quote is built the same way.

That does not mean one channel always wins. Some retail lenders have strong portfolio products or builder relationships. But for score-sensitive files, shopping structure matters. Around Richmond, borrowers may also compare names such as CapCenter, Movement, NFM, Atlantic Coast, C&F, CrossCountry, Rocket, Veterans United, CMG, Alcova, Embrace, First Heritage, 804 Mortgage, Sparrow Home Loans, CF Mortgage, and local teams including Jay Bowry at Movement and the Cowart Team. Colonial 1st Mortgage has appeared in Richmond and Glen Allen directory listings, but the Better Business Bureau lists the business as out of business, its domain no longer resolves to a functioning mortgage company website, and its most recent Yelp review was posted in 2017. Borrowers who encounter Colonial 1st Mortgage in search results should verify current licensing status at nmlsconsumeraccess.org before making contact.

5-step roadmap before you apply

Check your middle mortgage score, not just a consumer app score. Mortgage scoring models can differ from what you see in free dashboards.

Review utilization. If revolving balances are high, paying them down can move the score more than people expect, especially when cards are near their limits.

Avoid new credit before application. A new auto loan or retail card can shift both score and debt-to-income.

Build reserves if possible. For jumbo, investment, or non-QM loans, six to twelve months of reserves can materially strengthen the file.

Match the loan to the file. FHA can outperform conventional for some lower-score borrowers. VA can be excellent for eligible veterans because there is no monthly mortgage insurance. Bank statement or DSCR options may help self-employed borrowers or investors when tax returns do not tell the full story.

FAQ

What is the minimum credit score for a mortgage?

Usually 620 for conventional and 580 for FHA are the common starting points consumers hear most often, but lender overlays and the full file still matter.

Can I get a mortgage with a 600 credit score?

Possibly. FHA or certain VA-aligned lender programs may be options, but pricing and documentation may be less favorable than at higher score bands.

What credit score mortgage approval needs for jumbo loans?

Jumbo loans commonly start around 680 to 720 or higher, with stronger reserve requirements and larger down payments.

Does a higher credit score lower mortgage insurance?

Often yes. On conventional loans, both rate and private mortgage insurance pricing can improve with stronger scores.

Will prequalification hurt my credit?

A soft-pull prequalification generally does not create the same impact as a hard inquiry. Final underwriting may still require a hard pull.

Is FHA always better for lower scores?

Not always. FHA can help with approval and down payment flexibility, but mortgage insurance structure may make conventional better once score and down payment improve.

How much reserves do I need?

Many standard owner-occupied loans need little or no post-closing reserves, but jumbo, investor, and non-QM files commonly require several months, sometimes six to twelve.

How local does this get in Glen Allen?

Very local. A buyer targeting established neighborhoods near Nuckols Road may face different price points and competition than a buyer looking in Innsbrook condos or farther east in Henrico.

This article is for educational purposes only and does not constitute financial or legal advice.

When you are trying to improve approval odds, the most useful move is not guessing at one magic score. It is understanding which loan structure gives your current credit profile the best payment, the lowest cash-to-close stress, and the clearest path to closing in a competitive local market.