If you’re currently considering buying your first home in California, you may be wondering if you’ll qualify for a mortgage - and you’re not alone. Recent research conducted by Fannie Mae found that some potential homeowners hesitated to apply for a mortgage because they had concerns about their ability to qualify.
Here are the three biggest misconceptions found by the Fannie Mae study. Consumers assumed that their credit score might not be high enough to qualify, they would need to produce a 20% downpayment, or their current debt level would disqualify them.
If any of these misconceptions are holding you back from applying for a mortgage, here’s some good news.
1. The minimum credit score required for a home loan is probably lower than you think.
Half of those interviewed 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, while 32% thought it needed to be higher than 620.
The minimum credit score to quualify for a conventional home loan with Private Mortgage Advisors 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 your area, or if you find a starter home at an attractive price.
2. Down payment requirements for loans start at just 3.5%. Some offer zero down options.
Of the survey respondents, 13% thought the minimum was 20% of the loan amount, while 1 in 5 thought the minimum was 6-10%. Here’s more good news: Private Mortgage Advisors offers Federal Housing Administration (FHA) home loans thatmay require just 3.5% down for qualified borrowers. We also offer other mortgage programs by the U.S. Department of Agriculture (USDA) and the U.S. Department of Veterans Affairs (VA) which offer zero down payment loan options for qualified borrowers.
3. Your allowed monthly debt level may be higher than you thought.
This topic confused the 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.
Here’s some more good news.
Aug 01, 2019
When you choose Private Mortgage Advisors to provide your home financing, you’ll enjoy the best of both worlds: personalized service and a digital mortgage experience. Contact us today to discuss your options, and for answers to your home mortgage questions.
* Private Mortgage Advisors, 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.