Breaking down real estate myths

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Breaking down real estate myths.  Real estate and financial lending are both industries that change frequently.  It is true that both dance together in a constantly changing market.  There have been times when real estate was hard and then easy to finance.  There have also been times when interest rates were much higher and then lower.  Available housing inventory can also change, dictating if it is a sellers or a buyers market pulling on the strings of demand.

But as the Aspiring Home Buyers Profile     published by the National Association of Realtors (NAR) found is that the American public is still somewhat confused about what is required to qualify for a home mortgage loan in today’s housing market.  There is also plenty of confusion about the steps to take for success.  One thing that the profile did show is that the American people still fell that real estate is still a part of the American dream and important to financial success.

The Down Payment Myth

I think that we have all heard “It takes at least 20%” to buy a home.   This is really just plain wrong.  A recent survey by Laurel Road, the National Online Lender and FDIC-Insured Bank, revealed that consumers overestimate the down payment funds needed to qualify for a home loan.  Today, lenders want to make loans again.  In addition, there are special programs through FHA and VA which can require as little as 3% down.  If you are a veteran and honorably served our country, you may qualify for no down payment and may even be able to roll in your closing costs.

The FICO Score Myth

Have you heard the old news?  The one that says it will take a perfect credit score to buy a home.  Just like the down payment myth, this is wrong as well.  This myth though is especially hurtful, because a lot of people believe it.  There are many reasons that a FICO score could be lowered.  A large portion of this is because of incorrect information on the report.  But even if you just have a lower credit score, do not think that you can’t qualify for a home. Lenders have loan programs available for many different types of buyers, even those without perfect credit scores.

The average conventional loan closed in May had a credit score of 753, while FHA mortgages closed with an average score of 676. The average across all loans closed in May was 724. The chart below shows the distribution of FICO® Scores for all loans approved in May.

Below is a great illustration provided by Keeping Current Matters utilizing data from Ellie Mae.

One of the interesting points of this illustration is that people who had a credit score of 750 and higher totaled 47.8% of all closed loans, while the group which had a lower score accounted for 51.5% Most the homes were purchased with people who had scores between 600 and 749.

All real estate is local. York County South Carolina has a lot to offer.Whether you want to visit the lakes, or be entertained you will not be letdown. York County also has medical centers and higher education centersavailable. If you are thinking of making a move, give us a call. We have thedeep community roots and network to help you find your next home. We can showyou all of the beautiful areas of York County.

We would like to invite you to visit ArbieTurnerHomes.com, specializing inthe Rock Hill, Fort Mill, Indian Land and Tega Cay areas of South Carolina. Ourteam has made available tours of subdivisions in each city for your review. Weare deeply knowledgeable of these areas, which is why you want to choose us foryour real estate needs.

Courtesy of Arbie Turner Homes Keller Williams Fort Mill SC

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