Is it really that hard to qualify for a loan?

What Do You Really Need to Qualify for a Mortgage?

 Thursday September 3rd, 2015  Down Payments, Millennials

A recent survey by Ipsos found that the American public is still somewhat confused about what is actually necessary to qualify for a home mortgage loan in today’s housing market. The study pointed out two major misconceptions that we want to address today.

1. Down Payment

The survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 36% think a 20% down payment is always required. In actuality, there are many loans written with a down payment of 3% or less.

Here are the results from a Digital Risk survey done on Millennials:

2. FICO Scores

The Ipsos survey also reported that two-thirds of the respondents believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780. In actuality, the average FICO scores of approved conventional and FHA mortgages are much lower.

Here are the numbers from a recent Ellie Mae report:

Bottom Line

If you are a prospective purchaser who is ‘ready’ and ‘willing’ to buy but not sure if you are also ‘able’, let's get together to discuss your true options.

We are Mortgage Express, Powered by Mortgages USA, and we are your premier Texas and Oklahoma mortgage company. The company headquarters is based in Dallas, Texas but our branch is located right in Frisco, Texas. Our customer service is unparralleled and our mission is to make sure your experience is 100% satisfying. 

We specialize in a large variety of loan programs too include, FHA, USDA, VA, Conventional and Jumbo loans in the states of Texas and Oklahoma. We have a reputation of getting loans closed that other lenders can't or won't. Every prospective home buyer gets a full evaluation free of charge and everyone is treated with respect, whether they qualify now or not. Our mission is to help each customer buy a home, whether that is in the next 30 days or the next year!

Our business is based on referrals from builders, realtors and past clients, which simply means that every prospective buyer counts and all expectations have to be met. That is why our company mission statement is simple:

 Mortgage Express 

3400 Eldorado Parkway Suite 3
McKinney, Texas 75070
Phone: (972) 668-LOAN
Fax: (214) 975-2935
team@mortgagexloan.com

Don't get caught in the renter's trap

There are many benefits to homeownership. One of the top ones is being able to protect yourself from rising rents and lock in your housing cost for the life of your mortgage.

The National Association of Realtors (NAR) released their findings of a study in which they studied “income growth, housing costs and changes in the share of renter and owner-occupied households over the past five years in metropolitan statistical areas throughout the US.”

Don’t Become Trapped

The study revealed that over the last five years a typical rent rose 15% while the income of renters grew by only 11%. If you are currently renting, this disparity in growth could get you caught up in a cycle where increasing rents continue to make it impossible for you to save for a necessary down payment.

The average renter in the United States pays 30% of their income on housing compared to that of a homeowner who can expect to spend 15%.

START YOUR HOME SEARCH HERE

In many metro areas the percentage of income spent on housing is even higher and continues to rise every year. Like in San Francisco, CA, where the average renter spends 59% of their monthly income on housing or nearly 65% in Boston, MA.

Homebuyers who purchased their home over the same five-year period locked in their housing costs and were able to grow their net worth as home values have increased and their mortgage balances have gone down.

Know Your Options

Perhaps, you have already saved enough to buy your first home. HousingWire reportedthat analysts at Nomura believe:

“It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment.

It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.” (emphasis added)

As we have reported last week, over 60% of Millennials who recently bought a home put down less than 20%; 36% put down less than 5%. Your dream home may be more attainable than you ever imagined!

Bottom Line

Don’t get caught in the trap so many renters are currently in. If you are ready and willing to buy a home, find out if you are able. Have a professional help you determine if you are eligible to get a mortgage.

Home Prices Rising! Appraisers say WHOA!

 Wednesday September 2nd, 2015  For Buyers, For Sellers, Pricing

Each month, Quicken Loans releases their national Home Price Perception Index (HPPI). This month’s report revealed that the difference in appraiser home value opinions as compared to homeowner estimates is continuing to increase. Chief Economist Bob Walters explains:

"Many homeowners around the country are seeing the national headlines about home value increases and they are optimistic about their equity increasing. While some areas are seeing the same level of home appreciation, or even more, there are also some areas that have slower home value increases. This can lead to homeowners and appraisers not quite seeing eye-to-eye.”

Here is a chart showing the increasing difference in opinions:

Though reports of home price increases have garnered many headlines over the last six months, most experts expect residential real estate values to start showing more historic levels of appreciation over the next five years. Walters addressed this issue:

“A slowing of home value increases adds to the misunderstanding of local home values. Appraisers are viewing the housing industry every day; they know when home values growth may be slowing. Homeowners may think values are still skyrocketing, when they have instead returned to more healthy appreciation in their area."

Bottom Line

When pricing your home, you should have a real estate professional help you fully understand where prices are and where they are headed in the future.