Fannie Mae?s article, ?What Consumers (Don?t) Know About Mortgage Qualification Criteria,??revealed that ?only 5 to 16 percent of respondents know the correct ranges for key mortgage qualification criteria.?
Myth #1: ?I Need a 20% Down Payment?
Fannie Mae?s?survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report,?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, but many programs actually let buyers put down as little as 3%.
Below are the results of a Digital Risk survey of Millennials who recently purchased a home.
As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!
Myth #2: ?I need a 780 FICO Score or Higher to Buy?
The survey revealed that 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.
To help debunk this myth, let?s take a look at Ellie Mae?s latest?Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.7% of approved mortgages had a credit score of 600-749.
Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.