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    You Do Not Need 20% Down to Buy Your Home Now

    You DO NOT Need 20% Down to Buy Your Home NOW! The  Aspiring Home Buyers Profile  from the National Association...

    • Juan Murray
    • June 25th, 2018
    • 2 min read

    You DO NOT Need 20% Down to Buy Your Home NOW!

    The Aspiring Home Buyers Profile from the National Association of Realtors (NAR) found that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market. The results of the survey show that the main reason why non-homeowners do not own their own homes is because they believe that they cannot afford them.

    This brings us to two major misconceptions that we want to address today.

     

    1. Downpayment

    A recent survey by Laurel Road, the National Online Lender and FDIC-Insured Bank, revealed that consumers overestimate the down payment funds needed to qualify for a home loan.

    According to the survey, 53% of Americans who plan to buy or have already bought a home admit to their concerns about their ability to afford a home in the current market. In addition, 46% are currently unfamiliar with alternative down payment options, and 46% of millennials do not feel confident that they could currently afford a 20% down payment.

    What these people don’t realize, however, is that there are many loans written with down payments of 3% or less.

    Many renters may actually be able to enter the housing market sooner than they ever imagined with new programs that have emerged allowing less cash out of pocket.

     

    2. FICO®Scores

    An Ipsos survey revealed that 62% of respondents believe they need excellent credit to buy a home, with 43% thinking a “good credit score” is over 780. In actuality, the average FICO® scores for approved conventional and FHA mortgages are much lower.

    The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724. The chart below shows the distribution of FICO® Scores for all loans approved in May.

     

     Bottom Line 

    If you are a prospective buyer who is ‘ready’ and ‘willing’ to act now, but you are not sure if you are ‘able’ to, let’s sit down to help you understand your true options today.

     Courtesy of Simplifying the Market 

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    About the author

    Juan Murray

    (617) 721-0961
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    Juan got his start in the residential real estate market in 1994 and has never looked back. His mission is to provide excellence to his clients, and he is always looking for ways to improve the real estate experience for his clients and colleagues in the industry. Early in his real estate career, he worked as the Housing Rehabilitation Director for a national non-profit organization, Neighborhood Assistance Corporation of America (NACA). His goal was to gain more knowledge of the construction and renovation of existing homes in conjunction with working with 1st-time buyers. He effectively managed over 25 residential construction project managers on the East & West coasts while implementing procedures to improve communication between contractors, property owners, and banking representatives. He also developed resources, designed processes, and organized all aspects of real estate property acquisition and renovation. Juan completed a home inspector licensing course on his way to becoming a licensed home inspector. But after completing 30 inspections as an apprentice observer, after crawling under numerous porches and “crawl spaces,” he decided it wasn’t his cup of tea. Juan has always had a sharp eye for market trends and an innate understanding of what his clients need. That’s why, as a top real estate agent in Boston, he is constantly ahead of the curve, anticipating changes in the market and helping his clients manage their real estate goals. His keen intellect, quick wit, and tireless work ethic make him an invaluable partner for anyone looking to buy or sell property in the Boston area (or via his referral partners worldwide). Although Real Estate is a large part of his life, it is not the only part. He loves hanging out with family and friends, being in the kitchen, enjoying great food, anything Apple or Cole Haan, gadgets, great cigars, F1, motorcycles, photography, and traveling (to name a few). He lives with integrity and tries not to take life too seriously.

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    Juan Real Estate Group

    Juan Real Estate Group

    769 Centre St, Suite 209, Jamaica Plain, MA 02130

    769 Centre St, Suite 209, Jamaica Plain, MA 02130

    Call Us:

    (978) 581.0801

    Message Us:

    [email protected]

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