Urban Instituterecently released areportentitled, “Barriers to Accessing Homeownership,” which revealed that “eighty percent of consumers either are unaware of how much lenders require for a down payment or believe all lenders require a down payment above 5 percent.”
Myth #1: “I Need a 20% Down Payment”
Buyers often overestimate the down payment funds needed to qualify for a home loan. According to the same report:
“Consumers are often unaware of the option to take out low-down-payment mortgages. Only 19% of consumers believe lenders would make loans with a down payment of 5% or less… While 15% believe lenders require a 20% down payment, and 30% believe lenders expect a 20% down payment.”
These numbers do not differ much between non-owners and homeowners; 39% of non-owners believe they need more than 20% for a down payment and 30% of homeowners believe they need more than 20% for a down payment.
While many believe that they need at least 20% down to buy their dream home, they do not realize that programs are available that allow them to put down as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined with programs that have emerged allowing less cash out of pocket.
Myth #2: “I Need a 780 FICO® Score or Higher to Buy”
Similar to the down payment, many either don’t know or are misinformed about what FICO®score is necessary to qualify.
Many Americans believe a ‘good’ credit score is 780 or higher.
To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.
As you can see in the chart above, 53.5% of approved mortgages had a credit score of 600-749.
Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.
Author:John Priestash Phone: 972-800-7369 Dated: January 31st 2018 Views: 631 About John: John was born and raised in Pennsylvania and has now lived in Texas for 14yrs. Upon graduating high ...
In 1999, Courtney Robinson traded Boston’s three seasons of winter for the warm and welcoming spirit of the North Texas community. She has lived in Dallas, Denton, McKinney, and Melissa and has made her home in Plano since 2009.
She holds a Master's degree in Secondary Education from the University of North Texas and has spent most of her years as a Texan as a middle school teacher in Plano.
A life-long learner, Courtney is always looking for opportunities to improve the process of buying and selling homes in order to increase her clients’ comfort. Her strengths in planning and organization help her clients experience a tranquil transition; her methodical approach reduces the likelihood of surprises; and her razor-sharp research skills help to protect her clients’ investments.
Personable and professional, Courtney Robinson can turn a journey of a thousand miles into an easily-accomplished series of steps. Don’t mistake her compassion for complacency-- during negotiations and closing procedures, she represents her clients skillfully and tenaciously. She is as knowledgeable as she is calm and as thorough as she is patient.
Diligent, responsive, and always willing to go above and beyond to assure a calm and comfortable experience for her buyers and sellers, Courtney is proud to exceed expectations as a member of JP and Associates REALTORS.