More Than 80% of Americans Don't Have To Rent...
but are because they believe they have to because they think their credit score is too low to qualify to buy a home. Every year, every month, every day millions and millions of Americans are throwing away thousands and thousands of dollars because they don't know what you will learn here. Are you one of the 80% + that are throwing away a fortune because you don't know this fact?
FACT: You DON'T Need A Great Credit Score To Get A Mortgage
You're making your landlord richer every day! Lining their pockets with your money when you could be keeping it for you and your family — securing your financial future. We've all heard the saying, "What you don't know can't hurt you," but the truth is what you don't know can hurt you a great deal — even though you don't realize it.
So, what is it that so many don't know that is costing them a fortune? Most Americans' FICO scores are high enough to qualify for a mortgage and to buy a home of their own! The sad part is many believe that a FICO Score in the 800's or the 700's or even the 600's is necessary to buy a home with a mortgage.This misinformation is holding back countless Americans from realizing the AMERICAN DREAM!
What Credit Score Do I Need To Buy A House?
So many articles are written about how to get your credit score above 700, 800, etc. that it's common for would-be home owners to believe that they need to have great FICO scores to buy a house. But they don't — in fact you can buy a home with a credit score of 620 or even one below 600! This is fantastic news for the majority of Americans. It means most people can own their own home! In the Northern Virginia area and throughout the Commonwealth there are many great loan options to fit all kinds of home buyers.
What If My Credit Score Is Too Low To Buy A House?
The average American's Credit Score is already high enough to qualify for a mortgage, but some people still have scores that are too low to get a loan, or maybe they just want a higher score so that the qualifying process is easier and they will qualify for lower interest rates. The important thing to remember is that credit scores can be improved and it won't take forever to get them up. There are many helpful tips to get you started HERE: Get Your Credit Score Up Fast To Buy A House.
What Are The Different Types Of Mortgages?
These fall into conforming and non-conforming categories. Conforming loans have a maximum baseline limit of $484,350; however, in high-cost value areas such as the Northern Virginia metro area these limits are adjusted. In areas like Alexandria, Arlington, Fairfax, Falls Church and Prince Counties these limits are currently $726,525. A non-conforming loan would have a loan amount above the maximum conforming limit. These loans are also referred to as Jumbo Loans. Generally, conventional loans require a FICO credit score of 620 or higher. This is far from the 700+ scores many believe they need to have.
These are government-backed loans. FHA (Federal Housing Administration) doesn't actually lend any money; instead, what they do is guarantee the mortgages in case the borrower defaults on the loan. This insures the LENDER, not the borrower. For the FHA, in theory, the minimum score to qualify for a mortgage is 500, but there are added conditions if your score is below 580. These loans also allow as little as 3.5% of the sale price as down payment.
Are special loans made available to veterans, active duty and other individuals according to the requirements set forth by the Veterans Administration. The loan limits for a VA loan are currently $484,350. however, as with most other mortgages, these amounts are increased in high-cost housing areas, so in the Northern Virginia Metro area these limits are $726,525. These loans are fantastic for those with little or no money who want to own a home, as they allow you to by a home with nothing down!
Who Can Get A VA Mortgage?
You might qualify for a VA loan if:
You have served 90 consecutive days of active service during wartime,OR
You have served 181 days of active service during peacetime,OR
You have more than 6 years of service in the National Guard or Reserves,OR
You are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
Are There Special Mortgages Available In Virginia?
Virginia home buyers have another choice for financing a house a VHDA (Virginia Housing Development Authority) loan. VHDA offers a wide variety of benefits for home buyers: down payment grants, low and nothing down loans, and more. There are a wide variety of qualifications, including household income limitations, but many households in Virginia will qualify to use the VHDA mortgage. There are even special advantages to this loan for first-time home buyers.
Are Millennials Becoming Home Owners?
Most American renters (72 percent) say they want to buy a home at some point in the future instead of continuing to rent, according to the Pew Research Center American Trends Panel. This is true of millennials as well; in fact, according to the Census Bureau (see chart), a greater percentage of millennials are making the move from renting to home ownership than those over age 35.
What do Renters Need To Know Before Signing Another Lease?
- You don't need great credit — in fact, credit scores of 600 or even less can qualify you for a mortgage.
- You don't need a big down payment to buy a house; there are low- and even nothing-down loans.
- Owning costs less than renting.
- Home owners' net worth is 40+ greater than renters'.*
- Landlords now charge renewing tenants MORE than brand new tenants moving in during the same time.
*The Federal Reserve conducts a Survey of Consumer Finances every three years. The most recent study (2016) showed the median net worth of homeowners was $231,400 — a 15% increase since 2013. At the same time, the median net worth of renters decreased by 5% ($5,200 today compared to $5,500 in 2013).
In other words, RENTERS are getting poorer and HOME OWNERS are getting RICHER!
I Am Ready To Buy A Home. What Do I Do Now?
There are many steps to buying a home, but there is ONLY 1 best first step. Select your buyer's agent! This should come before you take any other step.
What to avoid doing before choosing a real estate agent to be your buyer's agent:
- Getting Pre-approved For A Mortgage.
- Going To An Open House.
- Looking At New-Construction Homes.
Why is choosing a buyer's agent the first thing you should do? The buyer's agent, once you have a signed agreement, is your representative. They are legally and ethically required to represent your best interests, and they are the only person in the process of buying a home that has this responsibility. Not the lender; not the settlement agent; not the home inspector; not the appraiser... the list goes on. By selecting your buyer's agent first, they can guide you and advise you — helping you to make the best choices.
"Is Your Credit Score High Enough To Buy A House?"
is brought to you courtesy of Dave Martin Realty Group, your Northern Virginia residential real estate experts. If you're considering selling or buying a house in the Northern Virginia metro area, we'd love an opportunity to earn your business, provide you an outstanding experience, and demonstrate to you that:
"Help From The Best Agent Makes All The Difference."
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