Freddie Mac recentlyreleaseda report entitled, “Perceptions of Down Payment Consumer Research.”Their research revealed that,
“For many prospective homebuyers, saving for a down payment is the largest barrier to achieving the goal of homeownership. Part of the challenge for those planning to purchase a home is their perception of how much they will need to save for the down payment…
…Based on our recent survey of individuals planning to purchase a home in the next three years, nearly a third think they need to put more than 20% down.”
Myth #1: “I Need a 20% Down Payment”
Buyers often overestimate the funds needed to qualify for a home loan. According to the same report:
22% of renters and 31% of homeowners believe lenders require 20% or more of a home’s sale price as a down payment for a typical mortgage today. And,
“If a 20% down payment was required, 70% of those who were planning to buy a home in the next three years said it would delay them from purchasing and nearly 30% indicated they would never be able to afford a home.”
While many believe at least20% downis necessary to buy the home of their dreams, they do not realize programs are available which permit as little as 3%. Many renters may actually be able to enter the housing marketsoonerthan they ever imagined!
Myth #2: “I Need a 780 FICO® Score or Higher to Buy”
Many either don’t know or are misinformed concerning the FICO® scorenecessaryto qualify, believing a ‘good’ credit score is 780 or higher.
To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.As indicated in the chart above, 52.4% 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:Lance Whipple PA Phone: 407-494-6030 Dated: June 10th 2019 Views: 94 About Lance: My name is Lance Whipple and I help first-time homebuyers, international investors, “active adults...
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During the housing market crash, Gen X homeowners lost more wealth tha
"I started working with Lance 18 months ago when we decided to move our offices to Florida. We wanted a home to base the offices that also allow us a place to stay. We rented for a year and then went on to buy a new home all through Lance. We gave Lance the basic description and he showed us homes that met our objective. He supported us in the rental and worked in our behalf on the purchase. Have a business owned home adds to HOA requirements and he worked with both the HOA and US Postal service to get us what we wanted. We are now in our 6-bedroom home in a gated golf community and we love our corporate office. When I come to work with our FL based team I stay in this wonderful home. Thank you Lance! "