Debunking myths about buying a Boston condo.
I’m amazed about the growing chasm between what Boston apartment renters believes to be needed and what is actually needed to qualify to purchase a Boston condo.
A recent survey by Ipsos reported that:
- Two-thirds of those surveyed believe they need a very good credit score to buy a condominium, with 45 percent thinking a “good credit score” is over 780.
- Consumers overestimate the down payment funds needed to qualify for a home loan, with 36 percent thinking a 20 percent down payment is always required.
However, according to American Enterprise Institute’s International Center on Housing Risk’s May First-Time Buyer Mortgage Risk Index (FBMRI), reality is far from perception. The report reveals:
- 70% of first-time buyer mortgages had a combined loan-to-value ratio of 95% or higher
- About 20% of first-time buyers taking out mortgages had a FICO score below 660
- 25% had total debt-to-income ratios above 43 percent
- The median first-time buyer with an agency mortgage made a down payment of only 3 percent, or $7200 in dollar terms.
- The median FICO score for first-time buyers with agency mortgages was 705
- For first-time buyers with FHA-insured loans, the median FICO score was only 672
These numbers contradict the frequent claims that first-time buyers face difficulties in obtaining mortgages.
Stephen Oliner, co-director of AEI’s International Center on Housing Risk explained the reality of the situation.
“One hears all the time that first-time buyers have limited access to mortgage debt. But this isn’t true. Many first-time buyers with low FICO scores and little money down are buying homes every month
If your thinking about buying a Boston condo and would like to learn more abut the process of owning, please call Janet Lamb on her cell at 617-721-9504. Janet has helped many first time Boston condo owners, she has over 20 years of expereince and would be very happy to help you in your home search. Let’s start 2018 as a Boston condo owner, its time for you to stop paying rent to your landlord.
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Updated: January 2018