First-Time Buyer Guide: Navigating the Mortgage Process with a 620-660 Credit Score
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Buying your first home is a major milestone—and if your credit score falls in the 620–660 range, you may feel like you're behind the curve. The good news? You're not out of the game. Many lenders approve borrowers at or above a 620 score, provided other parts of your financial profile are solid.
In this guide, we'll walk you through exactly how to prepare your file, what lenders look at, the step-by-step process, and key mistakes to avoid.
1. Understand What Lenders Expect
Credit Score Minimums & What They Really Mean
Lenders typically regard a credit score of around 620 as the minimum for conventional mortgages. That doesn't guarantee easy approval—but it means you're in the eligible range.
💡 Pro Tip: Moving from 620 to 660 can save you thousands over the life of your loan with better interest rates.
Other Key Criteria: Income, Debt, and Property Type
📊 Debt-to-Income Ratio (DTI)
Your monthly debt should generally not exceed about 43–45% of your gross income
💼 Stable Income/Employment
Lenders want to see consistent employment and documented income (typically 2 years)
🏠 Property Eligibility
Choose a property type that qualifies for conventional financing (single-family homes, approved condos)
2. Pre-Launch: Get Your Financial House in Order
Review & Clean Up Your Credit Report
- ✓Pull your credit reports from all three bureaus (Equifax, Experian, TransUnion)
- ✓Carefully review for errors and dispute anything incorrect
- ✓Make sure your payment history is flawless in recent months
Reduce Credit Utilisation & Maintain Good Habits
- ✓Keep revolving credit utilisation under 30% of your limits
- ✓Avoid opening new credit cards or closing long-standing ones
Build a Down Payment & Savings Cushion
Start putting aside funds for your down payment, closing costs, and reserves. Having a larger down payment improves your approval odds. Get pre-approved to see your exact requirements.
💰 Target: $4,500-$15,000+ depending on your loan type and property price
Compare First-Time Buyer Programs
Compare Programs Now →3. The Mortgage Process Step-by-Step
Pre-Qualification
Contact a lender and submit your basic financial details to get an idea of what you can afford.
Pre-Approval
Submit formal documentation. The lender issues a pre-approval letter showing sellers you're serious.
Home Shopping
Begin your house hunt within your pre-approved budget.
Making an Offer & Underwriting
Submit an offer. The lender begins underwriting to verify everything.
Closing
Sign closing documents, pay closing costs, and become the homeowner! 🎉
4. Common Mistakes to Avoid
❌ Assuming you're stuck because your score isn't 700+
While higher is better, 620+ still gets you in the game with the right strategy.
❌ Opening new credit or making large purchases
Wait until after closing to make major purchases. New inquiries hurt your profile.
❌ Ignoring debt-to-income ratio
Even with decent credit, high debt can kill your approval odds.
❌ Choosing a property outside lender guidelines
Verify property eligibility before making an offer to avoid loan falling through.
❌ Delaying pre-approval
Get pre-approved early to stay competitive and lock in rates.
5. 6-Month Timeline to Buy
| Month | Task |
|---|---|
| Month 1 | Pull credit reports, dispute errors, start savings plan |
| Month 2 | Reduce credit utilisation, meet with a lender |
| Month 3 | Increase down payment savings, pay off small debts |
| Month 4 | Narrow your home search, lock in an agent |
| Month 5 | Request pre-approval, gather documentation |
| Month 6 | Make offers, prepare for closing |
Conclusion & Next Steps
If you're a first-time buyer with a credit score between 620 and 660, you can navigate the mortgage process successfully. Start by reviewing your credit, building savings, and talking to a trusted lender.
🎯 Your Action Plan:
- ✓Review your credit reports today
- ✓Start building your down payment savings
- ✓Talk to a trusted lender about pre-qualification
- ✓Choose the right home within your budget