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  • Featured Listings
    • 4490 Rosemary Way #2, Hugo MN 55038
  • Sold
    • 98 A South Drive, Circle Pines MN
    • 11311 – 134 1/2 Ave N, Dayton MN 55327
    • 4532 34th Avenue S, Minneapolis, MN 55406
    • 618 Humboldt Ave, St Paul MN 55107
    • 11327 Hanson Blvd NW, Coon Rapids MN55433
    • 10872 President Dr NE, Blaine MN 55434
    • 11319 Hanson Blvd NW, Coon Rapids, Minnesota 55433
    • 1908 87th Trail N, Brooklyn Park MN 55443
    • 7522 162nd Ave NE, Forest Lake, MN
  • House Values
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    • Serious About Selling?
    • “What you need to know to increase your home value…
    • Pre Sale Renovation
    • A Seller’s Guide to Negotiations and Counter Offers when Selling a House
    • Closing Costs When Selling A House In The Twin Cities
    • Home Seller Manual
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    • You Do Not Need 20% Down to Buy NOW!
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Michaela Gile
  • Buyers

You Do Not Need 20% Down to Buy NOW!

  • April 6, 2017
  • by Michaela Gile

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    • 1. Down Payment
    • 2. FICO® Scores 
      • Bottom Line

 

A survey by Ipsos found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. There are 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, 40% of consumers 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 revealed that 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.

The average conventional loan closed in February had a credit score of 752, while FHA mortgages closed with a score of 686. The average across all loans closed in February was 720. The chart below shows the distribution of FICO®Scores for all loans approved in February.

Again… You Do Not Need 20% Down to Buy NOW! | MyKCM

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, let’s sit down to help you understand your true options.

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