Many people still seem to be somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market.
One of the most asked questions i get is. Do i need 20% to qualify for a mortgage. The answer is No!!! In fact, most of the people that i work with came up with far less than 20% and some have received mortgages with no money down
There are two major misconceptions that I want to speak about today.
1. Down Payment
Most people overestimate the down payment funds needed to qualify for a home loan. 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. Call me today and i can see what programs you may qualify for.
2. FICO® Scores
62% 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 closing last year 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 last year. I have had clients that have had credit scores under 600 and still qualified for a home. Also ask me about our rapid re-score system that can raise your score in a matter of days in order to qualify.
If you are ready to fire your landlord and set yourself on the path to home ownership, lets sit down and i will help you understand your true options
TMG Home Loans
Your Path to Home Ownership
BRE 01863312 / NMLS 1478632