Potential home buyers often believe they need to put more money down to purchase a new home than what is actually required. Many renters feel that saving up for a down payment is one of the largest obstacles of purchasing a home. Unlike widely believed, 20% is not necessary for a down payment. Many renters are unaware for low-down payment programs. Let's crush these myths!
Myth #1: I need to put down 20%
Buyers tend to overestimate the money for a down payment needed to qualify for a home loan. Most home buyers are unaware of low-down payment and no-down payment assistance programs offered at the local, state, and federal levels. These programs help eligible borrowers to secure a down payment they can afford.
Many buyers believe that at least 20% down is required to purchase their dream homes. There are programs available that allow buyers to put down as little as 3%. With these low-down payments, many renters can become homeowners much sooner then they imagined.
Myth #2: I need a 780 FICO score or higher
Like the down payment, many potential home buyers don't know or overestimate what FICO score is necessary to qualify. Many Americans believe that a "good" credit score lies at 780 or higher. However, according to Ellie Mae's Origination Insight Report, 51.7% of approved mortgages had a credit score between 600-749.
If you are buying your first home or buying your dream home, knowing your options will put some ease on the mortgage process. You may be surprised, your dream home could be within your reach. Meet with one of our PorchLight agents to learn more!