Realtor.com’s recent article, “Home Buyers’ Top Mortgage Fears: Which One Scares You?” mentions that “46% of potential home buyers fear they won’t qualify for a mortgage to the point that they don’t even try.” If one of these myths holds you back from buying your New Jersey dream home, read on and learn why they're just not true!
Myth #1: “I Need a 20% Down Payment”
Buyers overestimate the down payment funds needed to qualify for a New Jersey 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 U.S. renters from buying. Rob Chrane, CEO of Down Payment Resource says
“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 they need at least 20% down to buy their dream home, but programs exist that allow buyers to put down as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined with newly emerged programs that allow less cash out of pocket.
Myth #2: “I Need a 780 FICO® Score or Higher to Buy”
The survey revealed 59% of Americans don't know either don't know (54%) or remain misinformed (5%) as to what FICO score is necessary to qualify. Many Americans believe 780 or higher comprises a "good" credit score. To debunk this myth, take a look at Ellie Mae's 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!
Whether buying your first New Jersey home or moving up to your New Jersey dream home, knowing your options will make the mortgage process easier. Your new home may be within your reach! Want to learn more? Contact Team Nest Builder's mortgage specialist, Matt Ziegert at Residential Home Funding Corp. now!