Putting up 20% for a down payment on a home is a big ask, especially for a Millennial. These last ten years have been rough, and have left many Millennials burdened with enormous college debt,
Down Payment And Credit Score Concerns
When friends who are currently renting homes or apartments talk to me about wanting this year to be the year that they finally buy their first home, there are two main issues that they are always concerned about: down payment and credit score.
Having a huge down payment is just not feasible for many people. And that's okay! The loans that require the least amount down are FHA loans. Or if you happen to be a veteran, a VA loan actually requires no money down! Let's take a look at FHA loan requirements.
FHA Loan Requirements
FICO® score at least 580 = 3.5% down payment.
FICO® score between 500 and 579 = 10% down payment.
MIP (Mortgage Insurance Premium ) is required.
Debt-to-Income Ratio < 43%.
The home must be the borrower's primary residence.
Borrower must have steady income and proof of employment.
Now of course, the higher your credit score, the more likely you will be to get a better rate on your loan. Fortunately, there are many things people can do to repair their credit on their own, for free!
Before you begin do-it-yourself credit repair, you’ll want to get copies of your full credit reports from all three bureaus (Experian, TransUnion, and Equifax).You can get your reports truly free, once a year, at www.annualcreditreport.com or by calling 1-877-322-8228. Other websites may claim to offer free reports, but the Federal Trade Commission (FTC) warns that these offers are often deceptive.
Check out https://www.moneyunder30.com/credit-repair for the rest of the steps in the credit repair process!
I grew up in Round Rock, and graduated from the University of Texas at Austin. I’ve lived all over our wonderful city, and I am a proud new home owner in the North Austin area. I am very passionate ....
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