Credit Scores for Home Buyers in 2011

Consumer lending is still tight, and your credit score will still be a major factor in 2011 if you want to get the best mortgage interest rates. Even if you don't have a top score, you may still be able to get a government-backed loan, such as an FHA, VA or USDA, at a decent rate.

To get the best rate on the market, you'll need to have a FICO credit score of at least 760. But if your credit score is between 700 and 759, your interest rate will be just 0.2 percent higher. That means your mortgage payment on a $200,000 loan will be about $20 more per month. You'll pay about $10,000 more over the life of the loan on a 30-year fixed-rate mortgage at about 5.06 percent. The lowest interest rate for top scorers is 4.86 percent this week.

If your credit score is between 680 and 699, you can still probably find a bank that will consider you for a mortgage, but you may be able to find a better rate by applying for an FHA, VA or USDA loan. Your best best is to work with an independent mortgage broker who is not tied to a particular bank; that way the broker can find you the bank that will offer you the best deal depending on your credit score.