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2 Myths Holding Back Buyers

In Realtor.coms recent article, Home Buyers Top Mortgage Fears: Which One Scares You? they mention that 46% of potential home buyers fear they wont qualify for a mortgage to the point that they dont even try.

Here are the two myths holding back buyers...

Myth #1: I Need a 20% Down Payment

Buyers overestimate the down payment funds needed to qualify for a home loan. According to the First Quarter 2017 Homeownership Program Index (HPI) from Down Payment Resource, saving for a down payment was the barrier that kept 70% of renters from buying.

Rob Chrane, CEO of Down Payment Resource had this to say,

There are many mortgage-ready renters today, but they dont know it. Often, homebuyers remain sidelined for years due to the down payment.

Many believe that they need at least 20% down to buy their dream home, but programs are available that allow buyers put down as little as 3%. 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.

Myth #2: I Need a 780 FICO Score or Higher to Buy

The survey revealed that 59% of Americans either dont know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.

Many Americans believe a good credit score is 780 or higher.

To help debunk this myth, lets take a look at Ellie Maes latest Origination Insight Report, which focuses on recently closed (approved) loans.

As you can see in the chart above, 53.2% of approved mortgages had a credit score of 600-749.

Bottom Line

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. Find out today, call your agent!

 

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