Debunking Some Myths About Mortgage Availability

Debunking Some Myths about Mortgage Availability

• Two-thirds of those surveyed believe they need a very good credit score to buy a home, with 45 percent thinking a “good credit score” is over 780.

• Consumers overestimate the down payment funds needed to qualify for a home loan, with 36 percent thinking a 20 percent down payment is always required.

• 70% of first-time buyer mortgages had a combined loan-to-value ratio of 95% or higher

• About 20% of first-time buyers taking out mortgages had a FICO score below 660

• 25% had total debt-to-income ratios above 43 percent

• The median first-time buyer with an agency mortgage made a down payment of only 3 percent, or $7200 in dollar terms.

• The median FICO score for first-time buyers with agency mortgages was 705

• For first-time buyers with FHA-insured loans, the median FICO score was only 672

Bottom Line

“One hears all the time that first-time buyers have limited access to mortgage debt.  But this isn’t true. Many first-time buyers with low FICO scores and little money down are buying homes every month.”