Consumers Think Getting a Mortgage is Much Harder than it Actually Is
June 11, 2019
It is not as easy to get a mortgage as it once was. In the wake of the subprime mortgage crisis, stricter lending standards were put in place. This put an end the practice of loaning to lenders with poor credit, little income, and no down payment. Consumers got the message, maybe a bit too well.
A new survey from Fannie Mae shows that the majority of consumers now think that qualifying for a home loan is much harder than it actually is. The majority of respondents were either unsure of or vastly overestimated the credit score need to obtain a mortgage. Half said they were unsure. Nearly a third thought you needed a credit score above 620. The minimum credit score for most loans is actually 550.
Consumers also assume a larger down payment is required. Again, the vast majority of respondents did not know how much was required. One-fifth assumed 6-10 percent needed to be put down. 13 percent assumed 20 percent was required. The reality is that FHA backed loans require only a 3.5 percent down payment.