Again… You Do Not Need 20% Down to Buy NOW!
A survey by Ipsos found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. There are two major misconceptions that we want to address today.
1. Down Payment
The survey revealed that 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 actuality, there are many loans written with a down payment of 3% or less.
Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.
2. FICO® Scores
The survey also revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores of approved conventional and FHA mortgages are much lower.
The average conventional loan closed in February 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. The chart below shows the distribution of FICO®Scores for all loans approved in February.
Bottom Line
If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, let’s sit down to help you understand your true options.
HAVE YOU SEEN OUR NO LISTINGS / NO ADVERTISEMENTS / NO HASSLE WEBSITE?
FREE buyers and sellers guides (updated every Spring/Summer/Fall/Winter) with tips for preparing your home for sale, getting your credit in order, and what to expect. Download for FREE. Also, over 500+ blog posts with market data, simple easy-to-understand tips, financial guides, and more. See it here by Clicking HERE. Then click either "Buying?" or "Selling?" at the top of the page.
Website available in English and Spanish.
Recent Posts
- Consumer Confidence in Economy & Housing is Soaring
- Looking to Move-Up to a Luxury Home? Now's the Time!
- Millionaire to Millennials: Buy Now!
- Renting or Buying... Either Way You're Paying a Mortgage
- The Foreclosure Crisis: 10 Years Later
- What Are the Experts Saying about Mortgage Rates?
- It's a Seller's Market! Should I Downsize Now?
- 4 Great Reasons to Buy This Spring!
- A Tale of Two Markets: Inventory Mismatch Paints a More Detailed Picture
- Mortgage Interest Rates Went Up Again... Should I Wait to Buy?