Although the internet can be a great resource for a variety of information, not all of the information is always correct. One of the most important decisions and the biggest investment of your life, home buying, tends to circulate a lot of misinformation. Most of that misinformation is in regards to how much of a down payment you need or what your credit score needs to be. Let’s go over the real facts about buying a home and knock those myths out, so they don’t hinder your ability to purchase!
Credit Scores
Though it may come as a surprise, you don’t need a perfect credit score to purchase a home. Traditional lenders will work with credit scores as low as 640, but your real estate agent can also connect you with local lenders that accept credit scores as low as 580. Although there are certain requirements needed to qualify for the loan, you don’t need a perfect score to qualify for a mortgage.
Down Payments
You don’t have to sell an arm and a leg to be able to purchase your dream home. There is a huge misconception that you need to pay a minimum of 20% down to buy. That information is outdated. These days, there are a variety of loan programs that only require 3-5% down. Based on your income or military status, you may even qualify for mortgage programs that require 0% down. Although you’ll expect to pay an additional 3% in closing costs, which is separate from the down payment, this is still significantly less than 20% of the purchase price. If you’re in a buyer’s market, you may even be able to negotiate for the closing costs to be covered by the sellers.
Be sure to connect with a local real estate agent to ensure you have the right facts. Don’t let online myths persuade you into thinking you can’t qualify or afford to buy a home. There are a variety of programs to help you buy your dream home. Since programs vary by county and state, it’s imperative to call your agent and let them fill you in on the facts.