Some Millennials are not looking to purchase a home because they don’t think they can qualify for a mortgage, according to a recent article published by the Wharton School of Business at the University of Pennsylvania.
Jessica Lautz, the National Association of Realtors’ Managing Director of Survey Research, says that there is a significant population that does not think they will be approved for a mortgage and that they don’t even try. Also quoted in the article is Fannie Mae CEO, Tim Mayopoulos, who said:
I do think that there’s a sense out there in the marketplace among borrowers that credit may not be available, especially for people with lower credit scores.
So, what kind of credit score is really needed?
A recent survey reported that two-thirds of the respondents believe they need a very good credit score to buy a home. Of those respondents, 45 percent believe a “good credit score” is over 780. Based on the graph below, the actual FICO score on closed loans (as reported by Ellie Mae) is much lower and has been dropping over the last several months.
If you are a Milennial that is considering a home purchase, you should get advice from a local real estate agent or mortgage professional now. You may be surprised at how much the requirements for a mortgage have eased.
Contact us today to start your home buying experience.