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, the average 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.
Bottom Line info
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. Contact us today. 910-279-9398.
Posts Tagged ‘wilmington economy’
William “Woody” Hall, senior economist at University of North Carolina Wilmington, predicts the Wilmington area will grow 3.5% this year and 3.8% in 2016. According to an article printed in the Greater Wilmington Business Journal, 3% is a key figure as it is the rate the economy needs to grow to keep the unemployment rate stable. Mr. Hall has been a senior economist for 41 years at UNCW.
The growth prediction is good news for the Wilmington area. His evaluation of the economic condition from the local economic indicators he uses show that with the exception of airport passenger traffic, there is a good outlook for 2015 – unemployment, residential real estate, retail sales, tourism and State Port activity show signs that the sectors have fully recovered or are on their way back from the Great Recession that crippled the economy about seven years ago.
Hall maintains that retail sales and tourism have rebounded completely from what was considered one of the worst economic downturns since The Great Depression. Furthermore in an economic outlook for 2015 released by a Wells Fargo analyst indicate recovery is gradually building with areas such as Raleigh and Charlotte leading the way. Asheville, Wilmington and Durham were specifically mentioned as growing areas. Most other areas in the state will grow at a slower pace than the stars mentioned above, according to the analyst.
A number of factors will contribute to the continual growth one of which is the possibility of increased interest rates. Taking advantage of the growing economy to purchase property now may save buyers increased interest rates and guarantee buyers a better selection of properties. As the economy continues to improve real estate “deals” of the past seven years are disappearing. Let us at Coastal Realty Connections help you take advantage of today’s market!