Obstacles to Home ownership: Perceived or Real?

Home ownership Simplified: Call Keji : 301-613-2043

 A recent study by Fannie Mae, What Do Consumers Know About The Mortgage Qualification Criteria?, revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. Let’s break down three such challenges.

 

 

Down Payment

Perceptions

Many renters have mentioned that the lack of an adequate down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

·                                 40% of all renters don’t know what down payment is required

·                                 15% think you need at least 20% down

·                                 An additional 4% think you need at least 10% down

The Reality

There are programs offered by Fannie Mae, Freddie Mac and FHA that require as little as 3-3.5% down. VA and USDA loans offer 0% down programs.

Find Out Which  Low Mortgage You Can  Qualify For

Credit Score

Perceptions

Many renters have mentioned that the lack of an adequate credit score is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

·                                 54% of all renters don’t know what credit score is required

·                                 5% think you need at least a 740 credit score

The Reality

Many mortgages are granted to purchasers with a credit score of less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average credit score on all loans is 722.

We have lenders that can work with low credit score: Find out More

Back End Debt-to-Income Ratio (DTI)

Perceptions

Many renters have mentioned that they carry too much debt which is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report:

·                                 59% of all renters don’t know what DTI is acceptable

·                                 25% think you need at under 25%

·                                 7% think you need under 39%

The Reality

Lenders like to see a back-end ratio that does not exceed 36%. Fannie Mae’s maximum total DTI ratio is 36% of the borrower’s stable monthly income. The maximum can be exceeded up to 45% based on credit score and other requirements.
Find out How Much You Can Afford

 

 

Bottom Line

Don't let a lack of knowledge or misinformation keep your family from buying a home this year. Let Us Meet  So We  evaluate your ability to buy now!

Keji & Associates of Fairfax Realty is a team of licensed agents working daily to get homes sold  for our clients in all parts of the metro area. We delight our clients by delivering  world class service every step of the way and we strive to create a win-win situation this  is all part of our values and beliefs. Contact us @ 301-613-2043, visit our website www.metrohomesrealty.com