You REALLY Do Not Need 20% Down To Buy NOW

Dont Need 20%- Home Loans by Karen Jones

A survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today. 

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% 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

The survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, theaverage FICO scores of approved conventional and FHA mortgages are much lower.

The average conventional loan closed in March had a credit score of 753, while FHA mortgages closed with a 685 score. The average across all loans closed in March was 722. The graph below shows how the average FICO Score required has come down over the last 12 months and has stayed around 722 for the last six months.

FICO-Score-home loans by karen jones

 

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, sit down with a professional who can help you understand your true options.

 

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AmeriFirst Financial, Inc., 1550 E. McKellips Road, Suite 117, Mesa, AZ  85203 (Corp. NMLS # 145368).  1-877-276-1974. Copyright 2015. All Rights Reserved. This is not an offer to enter into an agreement.  Not all customers will qualify.  Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions and limitations apply. AZ: Arizona Mortgage Banker License No. BK0013635; CA: Licensed by The Department of Business Oversight under the California Residential Mortgage Lending Act CA Lic #813H409; CO: Regulated by the Division of Real Estate; WA: Washington Consumer Loan Company License No. CL-145368. AmeriFirst Financial, Inc. is an independent mortgage lender and is not affiliated with the Department of Housing and Urban Development (HUD) or the Federal Housing Administration (FHA).  AmeriFirst Financial, Inc.  AZBK0013635- NMLS #145368

AmeriFirst Financial, Inc., 1550 E. McKellips Road, Suite 117, Mesa, AZ  85203 (NMLS # 145368). 1-877-276-1974. Copyright 2017. All Rights Reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions and limitations apply. Click Here for Licensing Information. The services provided by Karen Jones are not a condition, nor do they create any obligation for any form of remuneration for any real estate settlement service related to any referral.

 

 

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