Many misconceptions exist as to what it takes to purchase a home in today’s market. After the housing bubble burst in 2008, regulations tightened, in essence disqualifying many from the dream of home ownership. However, it has now been nine years, and a great deal has changed in the lending process. Let’s examine some of the misconceptions I have heard as a Realtor:
- I can’t get into a home without 20% down. This is simply no longer true. While conventional mortgages with the very best rates may require 20% down, many other options exist. For example, FHA loans can now be attained with only 3.5%, VA Loans can be no-money-down loans, and a number of grants (meaning no-repayment required) are available for assistance with down payments. In fact, good credit can go a long way to opening those doors. In addition, creative programs like equity-sharing programs are also becoming available. All of these programs have advantages and disadvantages, but they all provide possibilities. You might be very surprised even if you did not qualify for a home loan last year. 2017 might be the year you become a home owner. If you have a preferred lender, it may be time to check in with him/her and learn about these new programs and qualifications. If not, we’ll find you a lender willing to discuss these programs with you.
- I have to clear up every single debt I have before I apply for a home loan. While this is, of course, a great goal, having some debt doesn’t necessarily mean you don’t qualify for a home loan. While ratios exist, the only way to know for sure if you qualify is to talk with a lender.
- My student loans will disqualify me. In fact, while this may have been true for you in the past, changes have recently occurred in the way that student loans are figured in the qualifying calculations. Once again, don’t assume. A financial lender can help navigate this process for you.
These and others are among the misconceptions I have heard this spring from those who have felt discouraged and let their dreams of home ownership die only to learn that home ownership was very real for them. What if. . .just what if. . .a quick conversation with a lender makes you see that your dreams are really possible? Every situation is unique. I encourage you to talk with a lender today and find our what is truly possible.