If you’re considering buying your first home in Washington, you may be wondering if you can qualify for a mortgage … and you’re not alone. Recent research conducted by Fannie Mae uncovered three common misunderstandings that consumers perceive 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 financing with BKCO Home Loans.
1. 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 BKCO Home Loans is 620, but you may qualify for other home loans with a lower minimum score.
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.
2. 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 just 3.5% down for qualified buyers. BKCO Mortgage also offers loan programs by the U.S. Department of Agriculture (USDA), as well as the U.S. Department of Veterans Affairs (VA), which have zero down payment options for qualified buyers.
3. Your allowed monthly debt level may be higher than you think.
Researchers found that this question 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 homebuyers 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, so if you want to purchase a home in Washington, why not contact BKCO Home Loans today
? We’re here to help you. And we promise you’ll enjoy the best of both worlds: personalized service and a streamlined, digital mortgage experience.
* Stearns Lending, LLC 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