The path to home ownership is easier than many Home Buyers think. This is because Buyers often overestimate both the down payment and credit score needed to qualify for a home loan. In a recent article, First American Economic Blog shared:

"Saving for a down payment is one of the biggest obstacles faced by first-time home buyers. Dispelling the 20 percent down payment myth could open the path to homeownership for many more."

In my experience, it's not just first-time home buyers that underestimate their ability to obtain financing. There is a vast population of would be home buyers that will be glad to know there are mortgage programs available today with as little as 3%, 5% or 10% down. I meet with these Lenders everyday and I'm happy to share their contact information with you. 

According to the same article:

“Americans still overestimate the qualifications needed to get a mortgage, resulting in qualified potential buyers not even considering homeownership.

 

Expanding on this, Buyers make the mistake of assuming they need an 'excellent' credit score to be approved for a mortgage when in fact a 'good' credit score can work. Too often they assume their credit score won't cut the mustard and don't take the time to check. For example, believing 700 is a 'fair' credit score when it actually falls in a 'good' classification according to Experian. 

Here is the breakdown of credit score classifications according to Experian:

  • 16% Very Poor (300-579)
  • 18% Fair (580-669)
  • 21% Good (670-739)
  • 25% Very Good (740-799)
  • 20% Exceptional (800-850)

Another interesting fact is, according to Ellie Mae's Origination Insight Report, a whopping 41% of all recently approved loans had credit scores ranging from 650-750. 

So, with all of this in mind, if you or someone you know is considering buying a home but you're not sure if you qualify, I hope you'll reach out. In the worst case scenario you'll get sound advice on how to improve your credit score and in the best case scenario you'll be on the path to homeownership! To get started give me a call today! 703-216-2620

Best,

Susan