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.

Buying a home? Click here to perform a full home search

Selling a home? Click here for a FREE Home Price Evaluation

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.