Non-homeowners cite the main reason for not currently owning a home, as not being able to afford one.
Many people think 20% is the minimum. Actually, it is 3.5% or 5%, depending upon the loan.
This brings us to three major misconceptions that we want to address today.
1. Where to get a loan: Qualifying for a loan is not city specific. You can be pre-approved by any lender writing loans in the state of California. Good options are your bank, credit union or a loan broker.
2. Down Payment: 39% of non-homeowners say they believe they need 20% for a down payment on a home purchase. In actuality, there are many loans written with a down payment of 5% 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.
2. FICO® Scores: 62% of respondents 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. Currently a score of 620 or more qualifies for most loan programs.
If you are a prospective buyer, or know someone who is ‘ready’ and ‘willing’ to act now, but are not sure if you are ‘able’ to, let’s sit down to see what the options are.
You/They may be more ready than ever!!!