Buying Your First Home:
It’s Easier Than You Think!
According to a recent Fannie Mae survey, most people think it is much harder to buy a home than it actually is. Of the 3,000 people surveyed:
- About one-third of the responders thought their credit (FICO) needed to be higher than 620. Fourteen percent thought it needed to be higher than 680, The reality? The minimum FICO score needed to qualify for a loan is actually 550. Of course, it’s true that the better your score, the better terms you will get on your loan. Learn more about How Credit Scores Affect Your Mortgage – And What to Do About It.
- One-fifth of the responders thought they needed a downpayment between six and ten percent. Thirteen percent thought the minimum downpayment was 20percent. The reality? Potential buyers can secure an FHA loan with a minimum down payment of just 3.5 percent! Other options like VA loans and U.S. Department of Agriculture loans offer zero down payment options.
- A whopping 61 percent had no idea what the maximum debt-to-income ratio needed to qualify for a loan was, while most others thought the limit was 40 percent. The reality? Potential buyers can qualify for a mortgage with as much as 50 percent of their income going toward total debt payments. Learn how to calculate your ratio here. For more on this subject, be sure to read our related post, “I Can’t Buy a House Because…”
The Bottom Line
Buying your first home is much easier than most people think. Buyers may be ready to buy a home long before they realize! If you hope to own a home someday, start the process now by meeting with a good Realtor to map out a plan. Waiting years to buy will cost you equity, paying your landlord’s mortgage down instead of your own. Not to mention that rents will only keep increasing.
Learn more by downloading our guide for first-time homebuyers.
Contact us today to get started on your path to homeownership!