Judy Boyle, Realtor®, RE/MAX
An interesting thing happened to me this week. Then it happened again. Today, it happened a third time. What happened, you are probably wondering? To begin, I don’t typically market rental properties. But I did agree to market a couple of apartments in a four-family home for a long-term client of mine. The apartments, as expected, rented right away which left a large number of prospective tenants wondering if they were ever going to find a place. So I asked the question I always do: Gee, if you can afford to pay $1,600, or even $1,000, per month in rent, why wouldn’t you just go ahead and find out if you can buy a home?
So now you can probably guess what happened to me three times this week. That’s right, three separate individuals or couples told me they had no idea they could qualify for a mortgage.
In fact, the Federal National Mortgage Association (“Fannie Mae”) must have also realized this is a problem because it recently conducted its own study titled “What do consumers know about the Mortgage Qualification Criteria.” Real briefly, the study consisted of 3,868 consumers nationwide who were over the age of 18 and had at least a partial share in the decision-making process.
The results were, in my professional opinion, disturbing. For instance, 54% of those polled did not know what the minimum credit score requirement was to obtain a mortgage; 59 % did not know what the maximum debt-to-income ratio was while 40 % did not know what the minimum down payment requirement was. A staggering 40% of those polled believed a 20% down payment is required to purchase a home. To read the full report visit www.fanniemae.com.
Now, I am not a lender so I defer any specific questions to your preferred lender about the various financing programs available to you, along with the specific requirements of each. But I would like to briefly illustrate the actual Fannie Mae requirements to qualify for a mortgage. For instance, Fannie Mae requires a 3% down payment. The minimum credit score requirement is 620 and the maximum back-end debt-to-income ratio is 45%.
This information was eye-opening for the individuals referenced above…those who set out this week to RENT a home. Instead, those buyers who would otherwise have been paying $1,000 per month in rent are happily shopping for their $235,000 home. For those that were comfortable paying $1,600 in rent, this amount translates to a $365,000 home that they can call their own.
Boyle lives in Northborough where she is also a chapter leader of the Neighbor Brigade, a local nonprofit that assists families in times of crisis. She has been a real estate agent since 2003 and consistently wins awards and accolades for excellence in customer service and sales volume.
Her mission is to empower her clients to make smarter decisions through data-driven insights and local market knowledge. She invites you to follow her on Facebook at www.facebook.com/judyboylecares, call or email her for the Summer 2016 Home Buyer and/or Seller Guides, or just to talk Real Estate.
Judy Boyle, Realtor®
Serving Worcester & Southern
Middlesex Counties with
honesty and integrity since 2003