Buy A Home In Charlotte For A Lot Less Than 20% Down
If you're reading this article, it's likely that you're thinking about buying a home in Charlotte or a neighboring city in North Carolina, but you're not clear on mortgage amounts and credit score requirements.
Just like you, when it comes to what it takes to qualify for a home loan, not all homebuyers are fully mindful of the process or its requirements. In a recent Fannie Mae article, “New Fannie Mae study shows gap in consumer knowledge on mortgages” showed that a great many potential homebuyers have an overall lack of understanding of mortgage qualification criteria.
After serving thousands of homebuyers in the area, these are the top two reasons that we've found hold people back from realizing their dream of homeownership:
1.Not knowing the criteria for the minimum mortgage amount.
In the Fannie Mae survey, 40% of respondents did not know Fannie Mae's minimum mortgage qualification criteria requirements. On average, they said that 12% was the minimum requirement for a downpayment, but did you know that in fact Fannie Mae requires only a 3% down payment? What's more is that a whopping 30% of the people surveyed were renters planning to buy a home within the next five years!
While it's true that a 20% minimum down payment used to be what many lenders required of buyers, that's not necessarily been the case today. For many prospective home buyers in North Carolina, especially Millennials saddled with student loans, saving up for that 20% can mean a significant chunk of your income.
Not only will it take longer to obtain enough to meet that 20% requirement, but even when the required amount is met, it might severely impact how much leftover exists to afford to make monthly mortgage payments or cover any unplanned repair expenses or other home improvements that may arise.
2. Not knowing the minimum credit score requirements.
Respondents from the survey averaged their guess at 652 for the minimum requirement for a credit score. In reality, Fannie Mae requires a minimum score of at least 620. Why is there such a discrepancy? Many prospective buyers are worried that they won't qualify for a home loan because of poor credit history, so they don't even make an attempt to speak with a lender to see what options for which they may actually qualify.
Perhaps you simply don't know what your credit score is, and what you need to do to improve it so that you can eventually qualify for a home loan. Without that crucial information, you may otherwise remain a renter indefinitely; thinking that owning a home is permanently out of your reach.
By talking to lenders, even if you aren't sure you even qualify for a home loan, the information you will receive can be useful for mapping out your financial plan and making improvements to your credit score so you can meet minimum mortgage requirements in the near future.
When you already know what your options are as you start to shop for the home of your dreams, you will have an easier time of obtaining an affordable mortgage with less hassle! You may actually find that owning a home is much more affordable than you ever thought possible.
Are you ready to look at Charlotte homes for sale or are you searching in other areas of North Carolina? Look no further than Showcase Realty! Call us today at 704-997-3794 to receive the quality customer service you can rely on to find you the perfect home for your needs!
If you are looking to buy a home in Charlotte or anywhere in North Carolina see our 7 Best Strategies to Prevail in a Bidding War to assist in your home buying journey. Did you know that Charlotte, NC : Top Choice For Millennial Lifestyle and Real Estate?