Busting 2 Myths Preventing People From Getting a Mortgage

You don’t need to pay more than 20% down or have a FICO score 780 or more to get a loan. Here’s the truth about these myths.

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Today I want to address two common myths floating around out there that keep people ( especially millennials) from getting a mortgage.

Myth #1: You need to have more than 20% down.

I recently worked with young couple who wanted to buy a $500,000 condo. A 20% down payment on that $500,000 property would’ve cost $100,000, which for them would’ve been an exorbitant amount of money. That’s why I suggested they pay only 10% down. Paying less meant they’d have to pay the PMI (private mortgage insurance), but that payment would only be an additional $247 a month instead of the additional $50,000.

Ideally, paying 20% down would be awesome, but in some instances it might be better to talk to a lender and see if there’s a way you can come up with less money down and still get a house right away instead of paying a huge amount like $50,000.

The world of lending is more flexible than you think.

Myth #2: You need to have a FICO score of 780 or more.

Obviously, that’s a great credit score, but the fact of the matter is that 54% of all people typically have a score that’s less than that. There are many different loan programs out there, and any lender will probably be able to get you a loan if you have a score between 640 and 680. Just make sure you’re not in the 500s.

Whether you’re trying to buy a new home or buy your first home, don’t fall for these two myths. If you have any questions about this or any other real estate-related topic, feel free to reach out to me via phone or email. I’d be happy to help.

Is a Cash Offer Always Better Than a Financed Offer?

Cash offers are usually more appealing than financed offers, but as you’ll see today, there are other things to consider before you make a decision.

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Are cash offers always the best offers when it comes to selling your home?

I just recently had a client who faced this same question. They listed their home for sale and received two offers—one of them cash, one of them financed. The cash offer was about $10,000 less than asking price, but it didn’t require any contingencies or inspections. Furthermore, the buyer wanted to close quickly in 15 days. The financed offer, on the other hand, was at asking price, but that buyer wanted a multitude of inspections done and needed a larger closing period.

There’s more than meets the eye when it comes to cash offers.

In this instance, my seller went with the cash offer. In fact, they were happy to do so. The price was lower, but the quick closing period and the lack of inspections and closing costs were more than a fair tradeoff.

If your home is on the market and receiving multiple offers, though, should you always go with the cash offer? It depends. You have to consider other variables within the offer, like how fast it’s going to close and how many inspections it will require, and decided how important those variables are to you.

If you have any other real estate questions, please feel free to call, email, or text me. I look forward to helping you!