Mortgage Qualification – Questions Answered
A recent survey by Ipsos found 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 pointed out two major misconceptions.
1. Down Payment Requirements
The survey revealed consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% of those surveyed think a 20% down payment is required. In fact, many mortgage loans are underwritten with a down payment of 5% or less. Down payment assistance options may also be available.
2. FICO Score Requirements
The Ipsos survey reported two-thirds of the respondents believe they need a very good credit score to buy a home, with 45% thinking a “good credit score” is greater than 780. In reality, average FICO scores of approved conventional and FHA borrowers are much lower.
Below are the numbers from the latest Ellie Mae report.
If you are a prospective buyer who is ready and willing to purchase but not sure if you are will qualify, let’s talk to discuss your options.