Don’t Disqualify Yourself… 52% Of Approved Loans Have A FICO® Score Under 750

The results of countless studies have shown that potential home buyers, and even current homeowners, have an inflated view of what is really required to qualify for a mortgage in today’s market.

One such study by the Wharton School of Business at the University of Pennsylvania revealed that many millennials have not yet considered purchasing homes simply because they don’t believe they can qualify for a mortgage.

A recent article about millennials by explained that:

About 72% of aspiring millennial buyers said they’re waiting because they can’t afford to buy…

The article also explained that 29% of millennials believe their credit scores are too low to buy. The problem here is the fact that they think they will be denied a mortgage is keeping them from even attempting to apply.

Ellie Mae’s Vice President Jonas Moe encouraged buyers to know their options before assuming that they won’t qualify for a mortgage:

“Many potential home buyers are ‘disqualifying’ themselves. You don’t need a 750 FICO® Score and a 20% down payment to buy.”

So, what credit score is necessary?

Below is a breakdown of the FICO® Score distribution of all closed (approved) loans in July from Ellie Mae’s latest Origination Report.

Over 52% of all approved loans had a FICO® Score under 750. Many potential home buyers believe that they need a score over 780 to qualify.

Bottom Line

If owning a home of your own has always been your dream and you are ready and willing to buy, or if you are a homeowner who wants to move up, find out if you are able to! Meet with a local real estate professional who can help you determine if your dreams can become a reality sooner than you thought!

Posted by The KCM Crew


Home Buying Myths Slayed [INFOGRAPHIC]

Some Highlights:

  • Interest rates are still below historic numbers.
  • 88% of property managers raised their rent in the last 12 months!
  • The credit score requirements for mortgage approval continue to fall.

Posted by The KCM Crew

Get All the Facts about PMI

When it comes to buying a home, whether it is your first time or your fifth, it is always important to know all the facts. With the large number of mortgage programs available that allow buyers to purchase a home with a down payment below 20%, you can never have too much information about Private Mortgage Insurance (PMI).

What is PMI?

Freddie Mac defines PMI as:

“An insurance policy that protects the lender if you are unable to pay your mortgage. It’s a monthly fee, rolled into your mortgage payment, that is required for all conforming, conventional loans that have down payments less than 20%.

Once you’ve built equity of 20% in your home, you can cancel your PMI and remove that expense from your mortgage payment.”

As the borrower, you pay the monthly premiums for the insurance policy, and the lender is the beneficiary. Freddie Mac goes on to explain that:

“The cost of PMI varies based on your loan-to-value ratio – the amount you owe on your mortgage compared to its value – and credit score, but you can expect to pay between $30 and $70 per month for every $100,000 borrowed.” 

According to the National Association of Realtors, the average down payment for all buyers last year was 10%. For first-time buyers, that number dropped to 6%, while repeat buyers put down 14% (no doubt aided by the sale of their home). This just goes to show that for a large number of buyers last year, PMI did not stop them from buying their dream homes.

Here’s an example of the cost of a mortgage on a $200,000 home with a 5% down payment & PMI, compared to a 20% down payment without PMI:

The larger the down payment you can make, the lower your monthly housing cost will be, but Freddie Mac urges you to remember:

“It’s no doubt an added cost, but it’s enabling you to buy now and begin building equity versus waiting 5 to 10 years to build enough savings for a 20% down payment.”

Bottom Line

If you have questions about whether you should buy now or wait until you’ve saved a larger down payment, let’s get together to discuss our market’s conditions and to help you make the best decision for you and your family.


Posted by The KCM Crew

How Fast Can You Save for a Down Payment?

Saving for a down payment is often the biggest hurdle for a first-time homebuyer. Depending on where you live, median income, median rents, and home prices all vary. So, we set out to find out how long it would take you to save for a down payment in each state.

Using data from the United States Census Bureau and Zillow, we determined how long it would take, nationwide, for a first-time buyer to save enough money for a down payment on their dream home. There is a long-standing ‘rule’ that a household should not pay more than 28% of their income on their monthly housing expense.

By determining the percentage of income spent renting a 2-bedroom apartment in each state, and the amount needed for a 10% down payment, we were able to establish how long (in years) it would take for an average resident to save enough money to buy a home of their own.

According to the data, residents in Iowa can save for a down payment the quickest in just under 2 years (1.99). Below is a map created using the data for each state:

What if you only needed to save 3%?

What if you were able to take advantage of one of Freddie Mac’s or Fannie Mae’s 3% down programs? Suddenly, saving for a down payment no longer takes 5 or 10 years, but becomes attainable in a year or two in many states as shown in the map below.

Bottom Line

Whether you have just begun to save for a down payment, or have been saving for years, you may be closer to your dream home than you think! Meet with a local real estate professional who can help you evaluate your ability to buy today.


Posted by The KCM Crew

Buying a Home Can Be Scary… Know the Facts [INFOGRAPHIC]

Some Highlights:

  • 36% of Americans think they need a 20% down payment to buy a home.
  • 44% of Millennials who purchased a home this year have put down less than 10%.
  • 71.8% of loan applications were approved last month.
  • The average credit score of approved loans was 731 in September.

Posted by The KCM Crew

Let us help you buy a home today!

2 Myths About Mortgages That May Be Holding Back Buyers

Fannie Mae’s “What do consumers know about the Mortgage Qualification Criteria?” Study revealed that Americans are misinformed about what is required to qualify for a mortgage when purchasing a home.

Myth #1: “I Need a 20% Down Payment”

Fannie Mae’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.

Many believe that they need at least 20% down to buy their dream home. New programs actually let buyers put down as little as 3%.

Below are the results of a Digital Risk survey of Millennials who recently purchased a home.

As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!

Myth #2: “I need a 780 FICO Score or Higher to Buy”

The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.

Many Americans believe a ‘good’ credit score is 780 or higher.

To help debunk this myth, let’s take a look at the latest Ellie Mae Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.1% of approved mortgages had a credit score of 600-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will definitely make the mortgage process easier. Your dream home may already be within your reach.

Posted by The KCM Crew

Down Payment Savings Tips for Renters

These clever ideas put homeownership within reach.

Ah, the perks of being a renter. No mortgage payments, no property taxes, no pesky maintenance work or repairs (leave that to your landlord to take care of!). Sounds like a good life, right?

Oh, wait, we almost forgot the big drawback: You’re not actually gaining equity in a home.

So what’s stopping you from buying a home? If you’re like most renters, it’s the lack of cash for a down payment.

Indeed, one in five Americans doesn’t even have a savings account — and one-third of those who do have a zero balance on their account, according to a recent survey by personal finance website Yikes!

The good news is, there are some simple ways to start saving money for a home purchase. Make these moves to build your down payment fund.

Set a target goal

Figuring out exactly how much house you can afford is key, because it allows you to determine how much you’ll need for a down payment.

Then put together a detailed savings plan, advises Andrea Blackwelder, Denver financial planner and founder of Wisdom Wealth Strategies.

Research shows people who set specific savings goals do a better job at putting money away than those who don’t.

“Just saving for a down payment isn’t enough,” Blackwelder says. “You need a hard dollar amount that you can work toward.”

Assess your spending habits

Look at your bank and credit card statements from the last three months to see where your money is going, then identify areas where you can cut back, says Brandy Wright, a certified financial planner at Cambridge Wealth Counsel in Atlanta.

Shrink your TV package

The average cable TV bill hit a record $99.10 last year, up 39 percent from 2010. Unless you’ve already cut the cord, downsizing your cable plan — and streaming shows instead — can help you save money.

Not willing to give up channels? Call you cable provider anyway, and try to negotiate a lower rate. If there’s another cable provider in your area, you’ve got leverage.

Drop the gym membership

It’s summer — get your exercise outdoors. “Jogging, hiking, and climbing outside is free,” Blackwelder points out.

Already locked into an annual gym membership? Your club might be willing to drop your rate if you get a friend to join.

Downsize to a smaller, cheaper apartment

Depending on where you live, going from a one-bedroom apartment to a studio can help you save thousands of dollars each year in rent.

“You need to live modestly if you’re serious about saving for a down payment,” says Wright.

Reducing your living space can also lower your heating and air-conditioning bills.

Get a side gig

It’s age-old advice, but it’s now easier than ever to pick up a side job, thanks to work opportunities such as Uber, Lyft, and Postmates, a food delivery service.

“Nowadays all you need to make some extra money is a car,” says Blackwelder.

You can also pick up freelance work through services like and

Open a high-yield savings account

Instead of keeping your cash in a checking account where it’s not earning interest, move the money to a high-yield savings account.

“You get complete access to the money and daily accrual of interest,” says Blackwelder.

Get a cash rewards credit card

Set aside your no-frills credit card and get a card with great cash-back rewards. Beverly Harzog, an independent credit card expert and consumer advocate, recommends the Blue Cash Preferred American Express Card, the Chase Freedom Credit Card, or the Citi Double Cash Card.

Caveat: Rewards credit cards typically have higher interest rates, so make sure you pay off your balance in full — and on time — each month.

Save your tax refund

While it’s tempting to spend what Uncle Sam gives you back each year, exert some willpower and put the money toward your down payment instead.

Unload your “stuff” locally…

Summer is peak season for throwing a good old-fashioned yard sale. Get the word out by promoting it on Craigslist, and posting signs in the neighborhood several days in advance.

Just be sure to consider the weather report before deciding what day you’re going to hold it. (Clear skies and comfortable temperatures lead to better turnout.)

… And online

Think there’s a niche market for some of your items? You’re probably better off selling them on eBay. Large pieces of furniture, meanwhile, tend to sell well on Craigslist.

Posted by Daniel Bortz on Zillow