If you’re considering buying your first home soon in Oregon or Washington, you may be wondering if you can qualify for a mortgage … and you’re not alone. Recent research conducted by Fannie Mae turned up some common misunderstandings about today’s home financing requirements.
Many consumers thought that their credit score wasn’t high enough to qualify for a home loan. Others incorrectly assumed they needed a 20% down payment, or that their current debt levels were too high. We’d like to clear up these misconceptions about qualifying for home financing with Equity Mortgage Group.
- The minimum credit score required for a home loan is probably lower than you think.
Half of those interviewed by Fannie Mae researchers said they were unsure of the minimum credit score needed to qualify for a loan.
- 14% thought the FICO score needed to be higher than 680.
- 32% thought it needed to be higher than 620.
The minimum credit score to apply for a conventional home loan with Equity Mortgage is 620, but we have other home loans that offer lower minimum scores for qualified applicants. And while a higher score may help you secure a lower interest rate, it may be well-worth buying your first home now if property prices are rising in areas where you plan to shop for a home. Finding a starter home at an attractive price is another reason to buy now instead of later.
- Down payment requirements for loans start at just 3.5%. Some offer zero down options.
13% of consumers surveyed thought the minimum was 20% of the loan amount, while 1 in 5 thought the minimum was 6-10%. Here’s more good news: Federal Housing Administration (FHA) home loans require qualified applicants to put down just 3.5%. Equity Mortgage also offers home loan programs by the U.S. Department of Agriculture (USDA), as well as the U.S. Department of Veterans Affairs (VA), with zero down payment options for qualified applicants.
- Your allowed monthly debt level may be higher than you think.
Researchers found that this topic confused most respondents. Most (61%) didn’t know how much debt they could be managing and still qualify for a home loan, while many others said the limit was 40%. However, you may qualify with up to 50% of your monthly income used to pay current debts.
While the majority of home buyers do their initial mortgage shopping online, less than half contact a local lender for home financing information. There’s no substitute for assistance from a licensed loan officer who’s familiar with the local lending markets, so if you want to purchase a home in Oregon or Washington, contact Equity Mortgage Group
Delivering personalized service and a streamlined, digital mortgage experience is a goal shared by everyone at Equity Mortgage Group.
* Equity Mortgage Group is an FHA Approved Lending Institution, and is not acting on behalf of or at the direction of HUD/FHA or the Federal government.
* Mortgage insurance may be required on loans greater than 80% loan to value and will increase your monthly payment.
Aug 01, 2019