While homeownership is the ultimate dream for many Americans, a large majority is unable to fulfill it. People think they can’t afford to buy a home, when they actually can. There are many perceived obstacles to home ownerships and they are all very manageable, even for first time home buyers.

Here are some of the biggest issues in the home buying process for American buyers:

1.     Down Payments

People are sometimes just afraid that they won’t have enough money for the down payment required to secure a property.

The simple fact is that the 20% down payment isn’t a strict requirement. Many loan programs such as FHA, USDA, Fannie Mae, Freddie Mac offer loans with 3 to 3.5% down payments, some even have 0% down programs. National Association of Realtors carried out research that revealed that the usual down payment for a first time homebuyer is 6%.

2.     Credit Scores

According to a Fannie Mae Report, 54% of renters don’t know what their credit score should be to buy a home. The fact is that it doesn’t need to be above 700. In fact, Ellie Mae reports an average credit score of 687 on closed FHA purchases. It is a common misconception that lending companies need an impeccable credit score.

3.     Debt to Income Ratio 

Many Americans believe that they carry too much debt to be able to afford a home of their own. Fact of the matter is that they can even find and buy a property with a 50% or lesser debt to income ratio. While it is true that lenders prefer a backend ratio that’s less than 35%. However, if yours doesn’t exceed 45% along with a decent credit score, and granted all other requirements are fulfilled, home ownership is a very real possibility for you.

The Last Word: Get Expert Help!

The guidelines from lenders, lawyers and realtors are ever changing. It is important that homebuyers work with experienced loan officers and real estate agents to find a property that suits their needs and budgets. Seek guidance early on in the process and don’t lose hope. Save for that down payment and do your utmost to clean up the credit. Anyone can achieve the ultimate American dream and buy a beautiful home with a bit of hard work and due diligence. 

Buying your own home is still a very real possibility for Americans. If you are interested in Orlando area real estate, please visit The Julie Boyd-Elrod Group for more information.