According to a survey by Ipsos, some Americans are still confused on requirements needed for a home mortgage in the housing market today. We will discuss two of the misconceptions.
1. Down Payment
Buyers tend to overestimate how much they need to qualify for a mortgage. The survey uncovered that 40% of buyers believe that a 20% down payment is needed. However, there are many loans given with a down payment of 3% or less. Great news for consumers who are confused on requirements for a home loan.
With new programs popping up, people renting are able to enter the housing market sooner than originally thought. These programs offer less up front cash.
2. FICO® Scores
The survey also uncovered that 62% of respondents thought they needed excellent credit to purchase a home. A large amount of the buyers in this survey ,43% of them, think a “good credit score” is over 780. So buyers are not confused on requirements, the reality is that the average FICO® scores of approved FHA and conventional loans are considerably lower.
In February, the average conventional loan had a credit score of 752, FHA mortgages closed with a score of 686. An average credit score of 720 spans across all loans that closed in February. Below is a chart showing the distribution of FICO® Scores for every loan accepted 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.
Realty Solutions Group was built around a simple but elusive concept: provide brokers and clients with the highest level of service in the industry through cutting-edge sales, marketing programs and a culture that values innovation, relationships and a strong local focus.
In less than 5 years, Realty Solutions Group is among the top independent brokerage firms in S/E Wisconsin.
As a locally-owned, independent company, Realty Solutions Group is deeply committed to supporting the communities and clients we serve. We are constantly evolving, but remain focused on that one simple idea behind our founding.
We are a full service brokerage with discounted commissions. We offer no long term listing contracts, a Performance Guarantee, Smart Seller Program and a Communication Guarantee. Contact us today and let us provide you with the very best real estate experience.
Leave a Reply