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The Credit Score You Need to Buy a Home in the Bay Area This 2021

Bay Area

Planning on buying your first home? Your credit score is one of the first things to look at when buying any type of real estate. It will dictate whether you are financially capable to buy a property and manage the payments. Your credit score also will serve as the foundation of your mortgage and is something that you need to maintain as you pay for your home in the next few years. Find out what makes a good credit score, how to work with mortgage brokers and realtors, how to secure a home loan, what types of home loans are available, and more.


The beautiful San Francisco is the fourth largest city in the state of California. With over 880,000 residents, it is home to such neighborhoods as Pacific Heights, The Marina, Telegraph Hill, and Russian Hill.

If you’re considering living in San Francisco, there are a lot of things to look forward to, particularly the great economy. In 2019, this city’s median household income at $123,859 was the highest among the most populated cities in the United States. The metro also ranks the highest among the best performing cities in 2020, based on factors such as skilled jobs, salaries, and GDP.

Surely a great place to live, San Francisco is a hub for economic excellence with expanding industries in technology and biotechnology and high-paying jobs. Innovation is the driver of success in this city, with continually growing high value added sectors like IT and design. Given these factors, the desire to live in and be part of this community is quite high. You’ll also notice this in the value of the properties when you look at condos for sale in the Bay Area.

Why your credit score is important

Your credit score should be one of your first considerations prior to buying a house in the Bay Area or any nearby community. A credit score is a gauge on the health of your finances which considers the following aspects:

  • Income
  • Savings
  • Current loans
  • Total debt
  • Payment history

A credit score ranges from 300-850 and represents your viability to apply for a loan and what type of loan you can apply for. A credit score ranges from poor to excellent:

  • Excellent: 800-850
  • Very Good: 740-799
  • Good: 670-739
  • Fair: 580-669
  • Poor: 300-579

The higher your credit score, the easier it is to apply for a loan. Likewise, the lower your credit score, the more difficult it is to secure a loan.

How to get a good credit score

Getting a good credit score takes time and work, and if you’re planning on living in San Francisco where real estate prices are higher than average, it is best that you be prepared. Here are three easy tips:

  • Pay your loans on time. A history of good payment within six months would help improve your credit score.
  • Try not to exceed your credit limit and pay your credit balances in full each month. If that’s not possible, a good measure is to keep your balance 30% less than your total credit limit.
  • Ask your bank to increase your credit limit. This is a quick workaround to help lessen and not exceed your credit limit.

Types of home loans

There are different types of home loans that you may qualify for when buying a condo in the Bay Area or any neighborhood in San Francisco. The required credit score also varies for each type of home loan. Here are the types of home loans that you can look into:

  • FHA Loan – The Federal Housing Association Loan requires a credit score of 500-580. If your credit score is on the lower range, you will be required to make a bigger down payment. For example, you would need a 10% down payment for a credit score of 500 versus a 3.5% down payment for a credit score of 580.
  • VA Loan – The Veterans Affairs Loan doesn’t require a minimum credit score and is specially for military, veterans, and their spouses. A VA loan does not require a down payment either.
  • Conventional Loan – A conventional home loan is offered by mortgage companies, with a required credit score of 620. Down payment would vary and would depend on the size of the loan.

Working with mortgage lenders

There are many mortgage lenders to choose from prior to looking into homes or condos in San Francisco. There are mortgage lenders that specialize in loans for first-time home buyers and for refinancing, while some mortgage lenders offer government-backed loans. You may also want to look into home loans by local or national banks.

Depending on your current financial situation and the type of property you’re buying, there is a mortgage lender who can help you finance your property with ease. Your realtor is the best person to ask for recommendations on mortgage brokers or where to apply for a loan depending on your specific requirements.

Get started on your home search

Ready to get started in your search for the best San Francisco homes for sale? Buying your first home may seem daunting, but with professional guidance, it will be an experience to remember.

Team Hatvany’s professional real estate agents can assist you in finding different types of properties, such as luxury homes, condominiums, and multi-unit residential properties. Schedule an appointment by sending an email to team(at)teamhatvany(dotted)com or calling 415.710.6462.

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