Everyone is ready to buy a home at a different time in their lives, and a health crisis or not, today is no exception. Understanding how affordability works and the main market factors that impact
You Do Not Need 20 Down Payment To Buy A Home
| 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 PaymentThe 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® ScoresThe 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 LineIf you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, we'd love to visit with you about your options. You can visit us online at www.MortgageXLoan.com to explore some of our programs. Ready to go give us a call 972-668-(LOAN).
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