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.
What Homebuyers Need To Know About Credit Scores
Your credit score is one of the most important factors lenders consider when you apply for a mortgage.
Why the Median Home Price Is Meaningless in Today’s Market
Using the median home price as a gauge of what’s happening with home values isn’t worthwhile right now.
Saving for a Down Payment? Here’s What You Need To Know.
One of the biggest misconceptions among housing consumers is what the typical down payment is.
Why Buying or Selling a Home Helps the Economy and Your Community
If you’re thinking about buying or selling a house, it’s important to know that it doesn’t just affect your life, but also your community.
Your Needs Matter More Than Today’s Mortgage Rates
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Are Home Prices Going Up or Down? That Depends…
We’re about to enter a few months when home prices could possibly be lower than they were the same month last year.
This Real Estate Market Is the Strongest of Our Lifetime
This is one of the most foundationally strong housing markets of our lifetime – if not the strongest housing market of our lifetime.
Real Estate Is Still Considered the Best Long-Term Investment
Real estate was voted the best long-term investment for the 11th consecutive year, beating gold, stocks, and bonds.
Oops! Home Prices Didn’t Crash After All
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Keys to Success for First-Time Homebuyers
The best way to make sure you’re set up for success, especially if you’re just starting out, is to work with a trusted real estate agent.