FICO SCORES DETAILS

The Myth of FICO Scores – Buying a House Is “POSSIBLE”

Thomas Gilliam credit , fico scores , home buying Leave a Comment

What is the first thing people worry about when they are considering buying a home for sale in West Bloomfield, Michigan? The FICO scores.

In your eyes, what is the perfect score? 800? 850?

When you are saving for the down payment, what is your goal? 15? 20?

All these questions have myths attached to them that stop you from buying your dream house.

You see, most people don’t have thousands of dollars lying around in their bank account. There are other needs such as energy bills, food, etc, that stop you from making a frivolous purchase. However, a house is a totally different matter.

Let’s have a look at John’s life:

John has been working as a supervisor in a departmental store for about three years now. He makes $15,000 in a year. He has been saving for the past 6 years, since he was in the last year of his college. He meets this amazing young woman at the day of his graduation and he falls in love. After 2 years of dating, they decide to get married. They make plans for the wedding and decide that it would be better to spend the money he has saved onto buying a house instead of going to a foreign country for their honeymoon. They look for a home for sale in West Bloomfield, Michigan and after 2 days, find the one they like. Instead of taking out a loan, John decides to spend all his money on the house. Now, his savings account is quite low and he is struggling with the house bills and maintenance. He eventually decided to take out a pay day loan but due to the high interest rates, he ends up in debt.

As you might have guessed, the mistake John made was almost emptying his savings account.

Why did he do this? It’s probably because he thought he wouldn’t be able to get a loan due to his low FICO scores. Let’s get to the main point:

Busting the Myth

Here’s a shocker for you: you do not need a high FICO scores to get a mortgage loan! You will get the loan but to keep himself safe, the lender will probably charge a slightly high interest rate. This is a better option than going broke like John, don’t you think?

FICO Scores for Loans

Year All Loans Conventional FHA
2014 727 755 684
2015 730 757 688
2016 726 753 686
2017 722 751 680
2018 726 753 677

Interest Rates

The good thing about interest rate is that they change very slowly. They either go up by 1% or down by 0.5%. So, you don’t have to worry when going with a variable interest rate loan. Here’s a breakdown of how drastically the interest rates have changed in the past 5 decades:

  • 1970: 8.86%
  • 1980: 12.7%
  • 1990: 8.12%
  • 2000: 6.29%
  • 2010: 5.21%
  • Today: 4.52%

The reason why most people who have saved enough money by living in co-accommodations don’t go for apartments is because landlords keep increasing the rent yearly, which can make you lose all your hard earned money.

So, now that you know you don’t need a high FICO scores for buying a home for sale in West Bloomfield, Michigan, you can start searching for your perfect American Dream. Looking for a house that falls under your budget? Visit Homes2MoveYou and get in touch with me directly at 248-790-5594 to start seeing houses in areas of your liking.

About the Author
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Thomas Gilliam

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I'm a Professional Realtor for 17 years with RE/MAX CLASSIC in the Oakland County MI and the Metro Detroit area and love what I do. Real Estate is my passion... Exceeding your expectations is my goal!