While conventional loans require a minimum credit score of 620, your minimum creditworthiness for other mortgage types may be lower or higher.
Refinancing a house loan can reduce monthly payments, provide more equity or get you out of debt sooner. However, you need a good credit score to refinance a house loan. If you’re wondering what the credit score needed to refinance a house loan is, the answer depends on the type of loan you have.
Lenders have different requirements depending on the type of loan you want. You can usually get a refinance if you have a 620 FICO score or higher.
“The better the credit score, the lower the interest rates and the better the loan terms,” says real estate lawyer William London.
How Do I Find Out My Credit Score?
The easiest way to find your credit score is to check with your credit card issuer. You can also get it checked via a mortgage lender or request a free annual credit check from Equifax, Experian or TransUnion (the three major credit bureaus). Also, free services and software can provide you with your credit score.
What is the Credit Score Needed to Refinance a House Loan?
Conventional mortgages require a 620 credit score or higher, and that score is sufficient for most types of loans. You will need a higher credit score to get a jumbo loan refinance. Raising your credit score can also help you get more competitive rates and terms.
Homeowners can choose from two types of refinances: rate-and-term refinancing and cash-out refinancing. A rate-and-term refinancing does not change the loan amount but adjusts the interest rate and the loan duration. You can add closing costs to the back end of your loan.
A cash-out refinance involves pulling equity out of your home and using those funds for any purchase. You will also change the rate and terms of your existing mortgage. Most mortgage lenders have the same credit score requirement for both refinances.
According to London, here are the minimum credit scores needed for the most popular home loan types.
| Loan Type | Rate-and-term refinance minimum score | Cash-out refinance minimum score |
| Conventional loans | 620 | 620 |
| FHA loans | 580 | 580 |
| VA loans | 500 | 500 |
| USDA loans | 620 | 620 |
| Jumbo loans | 700 | 700 |
Conventional Loans
Rate-and-term refinance minimum credit score: 620
Cash-out refinance minimum credit score: 620
Conventional mortgages are popular financial products that let you make a downpayment as low as 3%. You need a 620 FICO score or higher to get one of these loans. While requirements vary for each lender, most will require a debt-to-income ratio below 45%. You also must show employment history and have a loan-to-value ratio below 80%.
FHA Loans
Rate-and-term refinance minimum credit score: 580
Cash-out refinance minimum credit score: 580
Loans backed by the Federal Housing Administration (FHA) are more accessible financial products. You only need a 580 credit score to get a refinance. You must also have a debt-to-income ratio below 43% and a good employment history. Applicants need at least 20% home equity and no late mortgage payments during the last 12 months. FHA loans cater to people who want to live in their homes, so mortgage lenders will verify if you have resided in the house for the past 12 months.
VA Refinance
Rate-and-term refinance minimum credit score: 500
Cash-out refinance minimum credit score: 500
You can get Veterans Affairs (VA)-backed refinancing with a credit score as low as 500 from some lenders. The requirements vary for each lender, but you must provide your employment history, copies of your federal tax returns over the past two years, W-2 forms and additional information. Some loan providers give VA loans to homeowners with debt-to-income ratios as high as 41%.
USDA Refinance
Rate-and-term refinance minimum credit score: 620
Cash-out refinance minimum credit score: 620
Refinancing backed by the U.S. Department of Agriculture (USDA) has similar requirements as other financial products. You need a 620 FICO score and a debt-to-income ratio that is 41% or lower. You will also have to provide proof of citizenship and employment history. USDA refinancing differs from other financial products because you must demonstrate that your income does not exceed 115% of the median household income in your area.
Jumbo Refinance
Rate-and-term refinance minimum credit score: 700
Cash-out refinance minimum credit score: 700
Jumbo refinances are for properties that do not conform to the limits set by Fannie Mae and Freddie Mac. These loans have higher requirements, such as a 680 FICO score and a 43% debt-to-income (DTI) ratio or lower. Some lenders will not entertain DTI ratios above 38% and may require a second appraisal. You also need enough cash reserves to cover six to 18 months of mortgage payments.
The Bottom Line
The minimum credit score needed to refinance a house loan depends on your loan type. You’ll need a 620 score or higher for a conventional rate-and-term refinance. Here are the scores needed for other mortgage types:
- FHA loans: 580
- VA loans: 500
- USDA loans: 620
- Jumbo loans: 700
Why You Should Trust Us
Benzinga has offered investment and mortgage advice to more than one million people. Our experts include financial professionals and homeowners, such as Anthony O’Reilly, the writer of this piece. Anthony is a former journalist who’s won awards for his New York City economy coverage. He’s navigated tricky real estate markets in New York, Northern Virginia and North Carolina.
For this story, we worked with William London, a founding partner at Kimura London & White LLP. London specializes in real estate, trusts & estates law, family law and mediation services.
Frequently Asked Questions
What is a good credit score to refinance a house?
The credit score needed to refinance a house depends on the type of loan you’re refinancing, but generally speaking you’ll want to get your creditworthiness as high as possible to secure better rates and terms. A conventional loan requires a minimum score of 620.
Is it hard to qualify for a refinance?
No, qualifying for a refinance is not hard if you have good credit and stable income.
Do I need a downpayment to refinance?
Most lenders do not require a downpayment to refinance, though you may need to pay closing costs depending on your loan type. Conventional loans usually come with closing costs equal to 2-6% of the loan size.
Sources
- William London, founding partner at Kimura London & White LLP
About Anthony O'Reilly
Anthony O’Reilly is an updates editor for Benzinga. He’s won numerous journalism awards for his coverage of the New York City economy and Long Island school district budgets.
