Would You Qualify for a Mortgage Now?

The widespread myth that perfect credit and large down payments are necessary to buy a home are holding many potential home buyers on the sidelines. According to Ellie Mae’s latest Origination Report, the average FICO score for all closed loans in May was 724, far lower than the 750 or 800 that many buyers believe to be true.

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Below is a graph of the distribution of FICO scores of approved loans in May (the latest available data):

Looking at the chart above, it becomes obvious that not only do you not need a 750+ credit score, but 54.9% of approved loans actually had a score between 600 and 749.

More and more experts are speaking up about the fact that if potential buyers realized they could be approved for a mortgage with a credit score at, or above, 600, the distribution in the chart above would shift further to the left.

Ellie Mae’s Vice President, Jonas Moe encouraged buyers to know their options before assuming that they do not qualify for a mortgage: 

“The high median credit score is due to many millennials believing they won’t qualify with the score they have - and are therefore waiting to apply for a mortgage until they have the score they think they need.” (emphasis added)

CoreLogic’s latest MarketPulse Report agrees that the median FICO score does not always tell the whole story:

“The observed decline in originations could be a result of potential applicants being either too cautious or discouraged from applying, more so than tight underwriting as the culprit in lower mortgage activity.”

It’s not just millennials who believe high credit scores and large down payments are needed. Many current homeowners are delaying moving on to a home that better fits their current needs due to a belief that they would not qualify for a mortgage today.

So what does this all mean?

Moe put it this way:

“Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy.”

Bottom Line

If you are one of the many Americans who has always thought homeownership was out of their reach, meet with a local real estate professional who can help you start the process of being pre-qualified to see if you are able to buy now!

Schedule a FREE Home Buyer's Consultation with Jay Cermak Top Fort Lauderdale Real Estate Agent with The Edwards Real Estate Group at Keller Williams Realty!  Call or Text 954.235.3589

New Construction: Hear Those Hammers in the Background?

If you are planning on selling your home over the next two years, now may be the time to act. Demand is high, supply is low and many homeowners are benefiting from an almost auction atmosphere with several buyers fighting for their house in the current multi-bid environment. Higher prices and less stringent contingencies are making it easier for the seller and their family.

However, there may be more (and better) competition about to hit the market in the form of newly constructed homes. This may put an end to the buyers’ frenzy over the limited inventory of existing homes which has been below normal levels for over a year.

According to the latest report from the National Association of Realtors (NAR), the forecast for new housing starts and sales will increase significantly over the next two years:

• NAR is forecasting 1.1 million new housing starts in 2015, jumping to 1.4 million in 2016.
• New home sales are projected to increase from the 437,000 in 2014 to 570,000 this year and 720,000 in 2016.

Bottom Line

In major urban areas across the country, building cranes are again stretched across the city skyline. In many suburbs, you can again hear the thumping of a carpenter’s hammer in the background. Those are the sights and sounds that inform us that it may be time to sell.

Contact The J Team Fort Lauderdale and schedule your Home Buyers Consultation and we can discuss your New Construction options!  954-235-3589

Search Fort Lauderdale Homes for Sale including new construction at http://JTeamFL.com