The 2 Myths Of Qualifying For A Mortgage

1

April 26, 2016 by Jeff Lowen

A survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study unnamed (1)pointed out 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, 36% 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 reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent 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 March had a credit score of 753, while FHA mortgages closed with a 685 score. The average across all loans closed in March was 722. The graph below shows how the average FICO Score required has come down over the last 12 months and has stayed around 722 for the last six months.

unnamed (2)

The moral of the story…

If you are considering buying a home but are not sure if you are ‘able’ to, let’s sit down together so we can explore and help you understand your true options.

…And incidentally, there are also many programs that can help with your down payment as well!

Advertisements

One thought on “The 2 Myths Of Qualifying For A Mortgage

  1. […] Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Subscribe Today!

Not a Subscriber Yet? Click Now!

Picture of Jeff

Reach Out To Us!

Call or Text: 703-665-9739

Back Issues

%d bloggers like this: