Buying a home for the first time can be confusing and intimidating. More so if many of the things you believe turn out to be myths that only hinder you from starting your home search or making an offer on a home.
We're here to help you clear those misconceptions so you’ll have the right mindset and strategies on your path towards homeownership. I also can teach you how to grow your equity or pay part of your mortgage when you live in a multifamily home
1. “I need a 20 percent down payment.”
2. “I can't get a mortgage if I don’t have a perfect credit score!”
Similar to the 20% down payment, many Americans are also misinformed about the FICO score needed to qualify for a mortgage. They think that they need to have a “good” credit score of 780 or higher. But the truth is your credit score doesn't have to be perfect. The median credit score range for many approved mortgages in the past years is 670 to 739.
There are other factors that lenders take into consideration when deciding whether you'll be approved for a mortgage, including your employment history, debt-to-income (DTI) ratio, and the amount you can give as a down payment. Also, the required credit score also depends on the type of loan you’re pursuing. Conventional loans have the strictest standards and require a score of at least 620. Meanwhile, FHA loans need a minimum credit score of 580 (it may be higher based on this covid time). So if you have a lower credit score, don’t think that you’re already out of the game. There are measures you can take to improve it before applying for a mortgage.