Getting A Home Loan In Hawaii: 3 Common Mortgage Myths Debunked
If you’re considering buying your first home in Hawaii soon, you may be wondering if you can qualify for a mortgage. If you are, you’re not alone.
A recent consumer survey by NerdWallet found that 62% of Americans think a minimum 20% down payment of 20% is necessary to buy a home. One reason for this belief is that a 20% down payment is often shown as a qualifying factor when lenders publish their current rates online.
Another big concern is student loan debt. During the first quarter of 2021, it was determined that total student loan debt was up to $1.71 trillion, with 45 million consumers affected. This has convinced many would-be homeowners that their student loan balance will prevent them from qualifying for a mortgage.
If you’re still renting because you’re convinced you won’t qualify for a mortgage, think again. We’d like to clear up these misconceptions about qualifying with Compass Home Loans.
• 14% thought the FICO score needed to be higher than 680.
• 32% thought it needed to be higher than 620.
The minimum credit score to apply for a conventional home loan with Compass Home Loans is 620, but you may qualify for other loans, such as those backed by the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) with a lower minimum score.
When first applying for a mortgage, we’ll help you calculate your Debt to Income (DTI) ratio. This is your monthly gross (pre-tax) income, divided by the sum of your monthly debts. The lower your ratio, the more affordable your mortgage will be.
While it’s fine to start looking for a condo unit or house for sale online, there’s no substitute for personal assistance from a lender who specializes in the local housing market. Contact Compass Home Loans and you’ll enjoy the best of both worlds: personalized service and a streamlined, digital mortgage experience.
Sources:
*https://www.cnbc.com/2019/06/11/majority-of-consumers-are-wildly-wrong-about-mortgages.html
†VA loans that offer 0% down payment options are only available to qualified applicants with full entitlement.
Please note: Compass Home Loans is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. Mortgage insurance may be required on loans greater than 80% loan to value and will increase your monthly payment.
A recent consumer survey by NerdWallet found that 62% of Americans think a minimum 20% down payment of 20% is necessary to buy a home. One reason for this belief is that a 20% down payment is often shown as a qualifying factor when lenders publish their current rates online.
Another big concern is student loan debt. During the first quarter of 2021, it was determined that total student loan debt was up to $1.71 trillion, with 45 million consumers affected. This has convinced many would-be homeowners that their student loan balance will prevent them from qualifying for a mortgage.
If you’re still renting because you’re convinced you won’t qualify for a mortgage, think again. We’d like to clear up these misconceptions about qualifying with Compass Home Loans.
1. The minimum credit score required for a home loan is probably lower than you think.
Half of the consumers recently interviewed by Fannie Mae researchers* said they were unsure of the minimum credit score needed to qualify for a loan.• 14% thought the FICO score needed to be higher than 680.
• 32% thought it needed to be higher than 620.
The minimum credit score to apply for a conventional home loan with Compass Home Loans is 620, but you may qualify for other loans, such as those backed by the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) with a lower minimum score.
2. Down payment requirements for loans start at just 3.5%. Some offer zero down options.
Here’s more good news: Federal Housing Administration (FHA) home loans require just 3.5% down for qualified applicants. Compass Home Loans also offers loan programs partially guaranteed by the U.S. Department of Agriculture (USDA) and the U.S. Department of Veterans Affairs (VA). Both programs offer zero down payment options to qualified buyers.†3. Your allowed monthly debt level may be higher than you assumed.
Most Fannie Mae respondents (61%) didn’t know how much debt they could be managing and still qualify for a home loan, while many others said the limit was 40%. However, you may qualify with up to 50% of your monthly income used to pay current debts.When first applying for a mortgage, we’ll help you calculate your Debt to Income (DTI) ratio. This is your monthly gross (pre-tax) income, divided by the sum of your monthly debts. The lower your ratio, the more affordable your mortgage will be.
While it’s fine to start looking for a condo unit or house for sale online, there’s no substitute for personal assistance from a lender who specializes in the local housing market. Contact Compass Home Loans and you’ll enjoy the best of both worlds: personalized service and a streamlined, digital mortgage experience.
Sources:
*https://www.cnbc.com/2019/06/11/majority-of-consumers-are-wildly-wrong-about-mortgages.html
†VA loans that offer 0% down payment options are only available to qualified applicants with full entitlement.
Please note: Compass Home Loans is an FHA Approved Lending Institution and is not acting on behalf of or at the direction of HUD/FHA or the Federal government. Mortgage insurance may be required on loans greater than 80% loan to value and will increase your monthly payment.