Forbes.com recently published an article on the challenges first time home buyers are facing during 2020.
Not surprisingly, home prices made the top of the list.

Higher home prices translate into higher down payments, and according to the National Association of REALTORS®, median US home price is $350,000. That means a buyer would have to put down $70,000 (or 20%) on a purchase to avoid private mortgage insurance.

On the plus side, low down payment loans are available for those who can’t reach that 20% down payment threshold. For example, FHA loans require 3.5% down, which would be $12,500 on a median-priced home.

Additionally, lenders are requiring higher credit scores as default risks for existing homeowners mount amid the pandemic. The median FICO score for mortgages to buy a home is around 700, according to the Urban Institute’s July 2020 data. The pricier the market, the higher the FICO score often required. For example, the mean FICO for borrowers in San Francisco is 777.

Borrowers who don’t have a high credit score may find more luck with nonbank lenders, Forbes.com reports. The median credit score required for such a lender is 755, which is 15 points lower than the bank median of 770.

Buyers who are now working remotely and no longer tied to commutes may be drawn to moving away from urban centers in search of greater affordability. Rural areas have mortgages (USDA loans) that don’t require down payments; and some workers who can work from home may want to consider outer suburbs or small towns where USDA home loans are available and where homes are very affordable.

You might think that the dream of becoming a homeowner in Denver is one you’re not destined to reach. But don’t let the market discourage you – Metrowest has the experience and resources you need to put you in your dream home. Give us a shout today and we’ll start the process!