Whether you are considering the purchase of your first home or trading up to the home your family frequently fantasizes about, there are three crucial questions you must know the answer to:
- What is the minimum down payment required to purchase a home?
- What is the minimum FICO score required to qualify for a mortgage?
- What is the maximum Back-End DTI Ratio allowed?
A survey conducted by Fannie Mae revealed startling information: most Americans don’t know the answer to these three crucially important questions. Here is the percentages showing the results of the survey:
54% of you don't know the minimum credit score
40% don't know the minimum down payment
59% don't know the max back end debt to income ration
The percentages are quite disturbing but can explain why so many people believe they are not eligible to purchase a home whether it is a first home or a trade-up home. Here are the actually requirements as per Fannie Mae:
3% is the minimum down payment to purchase a home
620 is the minimum credit score required
45% is the max debt to income ratio on the back end
If you are considering purchasing a home, make sure you know all of your options!