Fannie Mae’s “What Do Consumers Know About The Mortgage Qualification Criteria?” study revealed that Americans are quite misinformed about what is really required to qualify for a mortgage when purchasing a home.
To help correct these misunderstandings, let’s take a look at the survey results compared to the latest Ellie Mae Origination Insight Report, which focuses on recently approved loans.
Survey Results vs. What’s Really Required
- 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. 53.9% of approved mortgages had a credit score of 600-749.
- 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.
- Many believe that they need at least 20% down to buy their dream home. New programs actually let buyers put down as little as 3%.
You Can Save for a Down Payment Faster Than You Think
In a study conducted by Builder.com, researchers determined that nationwide, it would take “nearly eight years” for a first-time buyer to save enough for a down payment on their dream home.
Depending on where you live, median rents, incomes and home prices all vary. By determining the percentage of income a renter spends on housing in each state, and the amount needed for a 10% down payment, they were able to establish how long (in years) it would take for an average resident to save.
According to the study, residents in North Carolina are able to save for a down payment the quickest in just under 7.32 years.
What if we changed that percentage? What if you were able to take advantage of one of the Freddie Mac or Fannie Mae 3% down programs? Suddenly saving for a down payment no longer takes 5 or 10 years, but becomes attainable in under two years in many states. In North Carolina, you could save up a down payment in just 2.19 years. Suddenly, owning a home isn’t a far off dream – it’s a reality that’s just down the road.
Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. It doesn’t matter if you’ve just started to save for a down payment, or have been putting away money for years – you may be closer to your dream home than you think! To find out how close, contact Coastal Realty Connections today. We’ll make sure you find the best home at the best price sooner rather than later.