If you think it might be a good time to buy a home in Minnesota, you may be wondering if you’ll qualify for financing - and you’re not alone. Recent research conducted by Fannie Mae found that many potential homeowners hesitated to apply for a mortgage because they had concerns that their credit score was not high enough to qualify for a home loan, they incorrectly assumed they needed a 20% downpayment, or their debt level was too high.
Here are the correct answers to three misconceptions about qualifying for a loan with Results Mortgage:
1. The minimum credit score required to qualify for a mortgage is lower than many buyers assume.
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 qualify for a conventional home loan with Results Mortgage is 620, but you may qualify for other home loans that allow lower FICO scores.
And while a higher score may help you secure a loan with 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 home at an attractive price.
2. Many consumers overestimated the minimum down payment requirement to qualify for a home loan.
13% of survey respondents thought the minimum was 20% of the loan amount, while 1 in 5 thought the minimum was 6-10%. Here’s more good news: Results Mortgage offers Federal Housing Administration (FHA) home loans that require qualified applicants to put just 3.5% down. Other home loan programs by the U.S. Department of Agriculture (USDA) and the U.S. Department of Veterans Affairs (VA) offer home loans with zero down payment options for qualified borrowers.
3. Your allowable debt level may be higher than you thought.
Most consumers (61%) didn’t know how much debt was allowed, while most others said the limit was 40%. However, you may qualify with up to 50% of your monthly income used to pay current debts.
We’re ready when you are.
While most consumers do their initial mortgage shopping online, less than half go to their lender with questions about home financing. Why not save time and start with a friendly conversation with a Results Mortgage Loan Originator today?
Aug 01, 2019
When you’re ready to apply, Results Mortgage offers a fully online mortgage application with regular loan status updates. You’ll enjoy the best of both worlds: traditional customer service and a streamlined digital mortgage experience.
* Results Mortgage, 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.