In a recent study, Fannie Mae released information about “What do consumers know about the Mortgage Qualification Criteria?”. The study revealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home. Here are three takeaways:
- 54% of consumers don’t know what FICO score is necessary
- 59% of consumers don’t know what an appropriate Back End Debt-to-Income (DTI) ratios is
- 40% of consumers don’t know about the minimum down payment required
To help correct these misunderstandings, let’s take a look at the latest Ellie Mae Origination Insight Report, which focuses on recently closed (approved) loans.
The average FICO scores for closed purchase loans range from 687 to 754.
Average Debt-To-Income Ratio
The average Debt-To-Income ratio for closed purchase loans is 35 to 42.
Average Down Payment
The average down payment for closed purchase loans ranges from 2% for VA loans to 31% for conventional loans. Across all loans, the average down payment is 21%.
If you are thinking of buying your first home or moving up to a larger home, knowing all of your mortgage options will give you more peace of mind and make the lending process easier for you. Whether you know it or not, your dream home may be within reach. Contact us today to find out how we can help with the home buying process.