by Tim Storm | Jan 14, 2016 | Conventional Loan
There are many common perceived hurdles to homeownership in Orange County, CA. However, studies have shown that many of the obstacles mentioned are perceived, not real. A recent study by Fannie Mae, What Do Consumers Know About The Mortgage Qualification Criteria?, revealed that many consumers are either unsure or misinformed regarding the minimum requirements necessary to obtain a mortgage. Let’s break down three such challenges. Down Payment Perceptions Many Orange County renters believe that the lack of a big enough down payment is preventing them from moving forward with the purchase of a home. According to the Fannie Mae report: 40% of all renters don’t know what down payment is required 15% think you need at least 20% down An additional 4% think you need at least 10% down The Reality There are programs offered by Fannie Mae, Freddie Mac and FHA that require as little as 3-3.5% down. VA actually allows $0 down payment up to a purchase price of $625,500 in Orange County. According to the National Association of Realtors, the typical down payment for a first time buyer is 6%. Credit Score Perceptions Many Orange County renters believe they do not have a high enough FICO score to move forward with the purchase of a home. According to the Fannie Mae report: 54% of all renters don’t know what credit score is required 5% think you need at least a 740 credit score The Reality Many mortgages are closed where the borrower has a FICO score less than 700. According to Ellie Mae, the average credit score on a closed FHA purchase is 687 and the average...
