Another Great Article From: Keeping Current MattersFannie Mae recently released their “What do consumers know about the Mortgage Qualification Criteria?” Study. The study revealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home. Here are three takeaways:
- 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary
- 86% of Americans either don’t know (59%) or are misinformed (25%) about what an appropriate Back End Debt-to-Income (DTI) ratios is
- 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required
To help correct these misunderstandings, let’s take a look at the latest Ellie Mae Origination Insight Report, which focuses on recently closed (approved) loans.
BACK END DTI
Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. Your dream home may already be within your reach.
Some Highlights From Keeping Current Matters
- 36% of Americans think they need a 20% down payment to buy a home. 44% of Millennials who purchased a home this year have put down less than 10%.
- 71% of loan applications were approved last month
- The average credit score of approved loans was 723 in September (the lowest recorded score since Ellie Mae began tracking in August 2011).
Okay, you have decided to buy a home, now what? The first thing you will need is your down payment and nerdwallet.com has some fun and easy ways to do just that.
- The $5.00 Bill Savings Plan: Ever time you receive a $5.00 bill, as change, a gift or you find the bill on the street, SAVE IT.
- Keep the Change: There are several ways that some banks offer to do this. As an example, Bank of America debit card holders can sign up for a program that rounds the purchase price up to the next whole dollar and puts the change in a linked savings account.
- Open a Savings Account: Salary bonuses, tax refunds, and raises go right into your savings account.
- Automatic Transfers: You’re trying to save money here. Let your bank know that every month you want a specific amount transferred from your checking to your savings.
- Keep your Old Car: Calculate what your new car payment would have been and put that amount in your savings account every month.
- See it and Believe It: Paste a picture of your dream home on the frig and wrap that picture around your most used credit card. Look at that picture when you grab that card to spend some money. Continue reading