Minneapolis, MN: There are plenty of myths that keep renters from becoming buyers. As with many myths, urban legend, folklore, and old wives tales, there may be a little truth to the story, but most of it is false.
As a Mortgage Loan Officer for over 20-years, it is a constant battle to dispel these stories, So here are a few myths versus facts to better educate prospective home buyers.
Nearly 50% of renters believe they need a down payment of 20% or more.
- FACT: While a few programs and situations require large down payments, most don’t. There are plenty of low down payment programs like HomeReady accept as little as 3% down. FHA loans are just 3.50% down payment. VA loans and USDA loans have no down payment required.
1/3rd or renters believe they need a credit score over 700 to buy a home
- FACT: Your best loan options are with a 640 or higher credit score, but there are also plenty of programs that will potentially approve a client with as credit low as 580. If you have a really big down payment, all the way down to a 500 score is possible.
The most common reason renter cite for not buying is the lack of down payment
- FACT: Sure, having a big down payment helps, but down payment assistance is available for qualified buyers. Gift from parents is a popular option, as is taking money from your 401k for down payment.
There are plenty of myths that keep renters from becoming buyers, now you know the facts.
My best advice is to simply not assume anything. If you would like to own a home, and you are not sure about your qualifications, I’m always happy to review your situation, go over the numbers, and explain all your options to buy a home.
If we can’t help you today, we will go over what would be needed in your situation to help you tomorrow. You have nothing to lose, and everything to gain.
If you are looking to buy a home in Minnesota, Wisconsin, or South Dakota – I can help. Simply call me at (651) 552-3681, or apply online at www.FirstTimeHomeBuyer-MN.com.
If you are in any other state, I suggest you contact a local mortgage broker in your area. Stay away from the big banks and the large Internet Lenders.