Know Down Payment Options

You Do Not Need 20% Down to
Buy a Home NOW!

A survey by Ipsos found that people are still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market.  Don’t rely on friends or family to share what they’ve heard!

The 2 big misconceptions about getting a purchase loan are:

1. Down Payment

The survey showed 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 reality, there are many loans written with a down payment of 3% or less.

Many renters may be able to enter the housing market sooner than they ever imagined – new loan programs allow for less cash out of pocket.

2. FICO® Scores

The survey also revealed 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780.  Data shows the average FICO® scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in February 2017 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.

Real Estate Bottom Line

If you are a prospective buyer, let’s get together so I can help you understand your options.