Buying a Home: What You Need to Know
Are you planning to buy a home in the near future? If so, you’re not alone. According to a recent study by Fannie Mae, three out of four Americans are planning to buy a home when they move. However, many potential homebuyers are overestimating the minimum down payment and credit score requirements needed to qualify for a mortgage.
Understanding Mortgage Requirements
The Fannie Mae study found that nine out of ten consumers surveyed overstated or didn’t know the minimum down payment required for most mortgages. Additionally, many were confused about underwriting criteria such as minimum credit scores and maximum debt-to-income ratios.
Why Consumers Think it’s a Bad Time to Buy a House
High mortgage rates and home prices have made consumers "extremely pessimistic" about homebuying conditions. In fact, 78% of consumers surveyed in December said it was a bad time to buy a home. However, mortgage rates were the primary concern for 37% of those who thought December was a "somewhat bad" or "very bad" time to buy.
Three in Four Households Plan to Buy Rather than Rent Next Time They Move
Despite concerns about the housing market or their own finances, only 26% of those surveyed plan to be renters the next time they move. Close to half of those who are currently renting (43%) plan to buy a home.
Most Who Plan to Buy Have Saved for a Down Payment
Close to three-quarters of people who are actively planning to buy a home have at least something saved up for a down payment. However, many may not realize that they may already have set enough aside to buy a home.
Growing Awareness of Low Down Payment Loan Programs
Consumers are increasingly aware of low down payment loan programs, with close to one-third (32%) saying they are "somewhat" or "very familiar" with such programs. Active home shoppers were much more likely to be aware of such programs (42%) compared to renters (29%).
Conclusion
Buying a home can be a daunting task, especially with the current market conditions. However, with the right knowledge and preparation, many consumers can successfully navigate the process. It’s essential to understand mortgage requirements, including down payment and credit score requirements, to make informed decisions.
FAQs
Q: What is the minimum down payment required for most mortgages?
A: The minimum down payment required for most mortgages is 3%, but many consumers surveyed in the Fannie Mae study overstated or didn’t know this requirement.
Q: What is the primary concern for consumers who think it’s a bad time to buy a home?
A: Mortgage rates were the primary concern for 37% of those who thought December was a "somewhat bad" or "very bad" time to buy.
Q: How many consumers plan to be renters the next time they move?
A: Only 26% of those surveyed plan to be renters the next time they move.
Q: What percentage of consumers are aware of low down payment loan programs?
A: Close to one-third (32%) of consumers are aware of low down payment loan programs.
Q: What is the most often cited source of information about mortgages?
A: Websites are the most often cited source of information about mortgages, with 50% of consumers relying on them for information.
By understanding these key facts and FAQs, consumers can better prepare themselves for the homebuying process and make informed decisions about their mortgage options.
Author: www.inman.com
Orginal Source link