2 Mortgage Myths That Could Be Scaring Buyers
Fannie Mae’s Study “What do consumers know about the Mortgage Qualification Criteria?” revealed Americans are misinformed about what is required when qualifying for a mortgage in order to buy a home.
Myth #1: “I Need a 20% Down Payment”
Fannie Mae’’s survey revealed consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about down payment requirements. New programs let buyers put down as little as 3% or down payment assistance programs require zero down payment.
As illustrated, 64.2% of buyers were able to purchase their home by putting less than 20% down, while 43.8% put less than 10% down!
Myth #2: “I need a 780 FICO Score or Higher to Buy”
The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about FICO scores necessary to qualify. Many believe a qualifying credit score is 780 or higher.
To clarify, let’s look at the latest Ellie Mae Origination Insight Report, which focuses on recently closed (approved) loans. As you can see, 54.1% of approved mortgages had a credit score of 600-749.
Whatever your reasons for buying a home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.