Freddie Mac recently sent out a report entitled, “Perceptions of Down Payment Consumer Research.” Their report uncovered the following:
“For some, First Time home buyers, putting something aside for an initial down-payment is the biggest obstruction to accomplishing the objective of home ownership. A portion of those who wanted to buy a home were trying to figure out the amount they should put down on a home and trying to see how they would set aside the amount and save the amount needed.
This was based on ongoing reviews of people wanting to buy a home with three years, almost a third of them think they have to put over 20% down.”
First Myth: “I Need a 20% Down Payment”
Would be Home Buyers regularly overestimate the amount of money needed to get a mortgage. As indicated by a similar report:
22% of renters and 31% of homeowners believe lenders require 20% or more of a home’s sale price as a down payment for a typical mortgage today. And,
“In the event that 20% is need up front, 70% of the individuals who were wanting to purchase a home in the following three years said it would defer them from purchasing a property and almost 30% said that they would never be able to manage the cost of home ownership.”
While many accepted the idea that 20% down was important to purchase the home they wanted, they don’t understand that there are programs out there that will allow as little as 3% down. Numerous would be homeowners may really have the option to enter home ownership sooner than later.
Second Myth: “I Need a 780 FICO® Score or Higher to Buy”
Many people feel that their FICO® score must be 700 or better or they must have great credit in order to purchase a home.
Let review this myth, we should look at Ellie Mae’s latest Origination Insight Report, which centers around recently approved loans.
As demonstrated in the diagram above, 52.4% of approved home loans had a FICO assessment of 600-749.
What that means to you?
It means that if you are thinking about buying a home then there are loans out there that will qualify you with 580 credit scores, or even 600 credit scores… But you must make the next move and contact me so that we can talk about your options in detail.