The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) noted that the American public is still confused about the requirements for a home mortgage loan in today’s housing market. The survey results show that non-homeowners say they aren’t buying a home because they don’t think they can afford one.
This brings us to the two major misconceptions that we want to address today.
1. Down Payment
NAR’s survey noted that consumers overestimate the down payment funds required to qualify for a home loan. According to the report, 39% of non-homeowners say they believe they need more than 20% for a down payment for buying a home. In actuality, there are many loans written with a down payment of 3% or less.
Many renters will be able to enter the housing market sooner than they thought with new programs that have emerged allowing less cash out of pocket.
2. FICO® Scores
An Ipson survey showed that 62% of respondents thought 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 August had a credit score of 752, while FHA mortgages closed with a score of 683. The average across all loans closed in August was 724. The chart below shows the distribution of FICO® Scores for all loans approved in August.
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.
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