Again… You Do Not Need 20% Down to Buy NOW!
A survey by Ipsos found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. There are two major misconceptions that we want to address today.
1. Down Payment
The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 40% of consumers think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less.
Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.
2. FICO® Scores
The survey also revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores of approved conventional and FHA mortgages are much lower.
The average conventional loan closed in February had a credit score of 752, while FHA mortgages closed with a score of 686. The average across all loans closed in February was 720. The chart below shows the distribution of FICO® Scores for all loans approved in February.
Bottom Line
If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, let’s sit down to help you understand your true options.
Why Home Prices Keep Going Up
Even though higher mortgage rates has caused buyer demand to moderate, home prices are going back up is because there still aren’t enough homes for sale for all the people who want to buy them.
Are Higher Mortgage Rates Here To Stay?
Experts typically recommend focusing your search on the right home purchase — not the interest rate environment.
Key Skills You Need Your Listing Agent To Have
A listing agent, also known as a seller’s agent, helps market and sell your house while advocating for you every step of the way.
Are You a Homebuyer Worried About Climate Risks?
Homebuyers are interested in finding out if the house they want will be exposed to things like floods, extreme heat, and wildfires.
Home Prices Are Not Falling
Don’t fall for the negative headlines and become part of this statistic. Remember, data from a number of sources shows home prices aren’t falling anymore.
Unpacking the Long-Term Benefits of Homeownership
Higher mortgage rates, rising home prices, and ongoing affordability concerns may make you wonder if you should buy a home right now.
Why Your House Didn’t Sell
For insight on why your home didn’t sell, rely on a trusted real estate agent. A great agent will offer expert advice on relisting your house with effective strategies to get it sold.
The Return of Normal Seasonality for Home Price Appreciation
Don’t let the terminology confuse you or let any misleading headlines cause any unnecessary fear.
Beginning with Pre-Approval
Pre-approval gives you critical information about the homebuying process that’ll help you understand how much you may be able to borrow.
Your Home Equity Can Offset Affordability Challenges
Some homeowners are reluctant to sell and take on a higher mortgage rate on their next home, but what about home equity?