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Two Myths Holding Back Home Buyers | Scottsdale Real Estate Arizona

Two Myths Holding Back Home Buyers - In Realtor.com’s recent article, “Home Buyers’ Top Mortgage Fears: Which One Scares You?” they mention that “46% of potential home buyers fear they won’t qualify for a mortgage to the point that they don’t even try.”

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 don’t 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 don’t 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, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

Two Myths Holding Back Home Buyers

 

 

 

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.

 

You may also enjoy reading the article that follows:

Jeff DaleyHome Buyers Top Mortgage Fears - Let's get real, shall we? Getting a mortgage can be a little frightening. Heck, a lot. Who doesn't get jittery at the prospect of coughing up a huge down payment, of letting lenders probe their financial past, and of ultimately committing to paying back what's owed, month after month, regardless [...]

 

 

Comment balloon 0 commentsJane & Jeff Daley, PhD • June 26 2017 08:26PM
Two Myths Holding Back Home Buyers | Scottsdale Real Estate Arizona
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