The results of countless studies have shown that potential home buyers, and even current homeowners, have an inflated view of what is really required to qualify for a mortgage in todayâ€™s market.
One such study by theÂ Wharton School of BusinessÂ at theÂ University of Pennsylvania revealed that many millennials have not yet considered purchasing homes simply because they donâ€™t believe they canÂ qualify for a mortgage.
A recent article about millennials by Realtor.com explained that:
â€œAbout 72% of aspiring millennial buyers said theyâ€™re waiting because they canâ€™t afford to buyâ€¦â€�
The article also explained that 29% of millennials believe their credit scores are too low to buy.The problem here is the fact that they think they will be denied a mortgage is keeping them from even attempting to apply.
Ellie Maeâ€™s Vice President Jonas Moe encouraged buyers to know their options before assuming that they wonâ€™t qualify for a mortgage:
â€œMany potential home buyers are â€˜disqualifyingâ€™ themselves. You donâ€™t need a 750 FICOÂ®Â Score and a 20% down payment to buy.â€�
So, what credit score is necessary?
Below is a breakdown of the FICOÂ®Â Score distribution of all closed (approved) loans in July fromÂ Ellie Maeâ€™sÂ latestÂ Origination Report.
Over 52% of all approved loans had aÂ FICOÂ®Â Score under 750. Many potential home buyers believe that they need a score over 780 to qualify.
If owning a home of your own has always been your dream and you are ready and willing to buy, or if you are a homeowner who wants to move up, find out if you are able to! Letâ€™s get together to determine if your dreams can become a reality sooner than you thought!
Source: Keeping Current Matters