What Does the Well-Qualified Buyer Look Like?

 

Most of us can describe the perfect house; the perfect car; the perfect spouse. How many of us can describe the well-qualified buyer? Most of us don’t have a picture of what this buyer looks like because for several years, we haven’t had to worry about well-qualified buyers. With the proliferation of loan products and ‘easy’ money, well-qualified was not a concern of most lenders and Realtors. 

 

Right now, to qualify for a conventional loan, a buyer must have at least a 660 to 680 FICO score; probably closer to the 680 figure. They must have verifiable employment (income) and at least 5% down payment.

 

FHA is not credit score driven. It is a product for first time homebuyers, but mortgage brokers are seeing previous homeowners obtaining FHA loans in this current market. In Maricopa County, the FHA loan limit is $346,000, which is considerably higher than the median home price; approximately $220,000. Sellers can contribute to buyer’s closing costs through both AmeriDream and Nehemiah programs, which are recognized charitable companies, handling sellers’ contributions for a fee. 

 

So, what does the well-qualified buyer look like? She (he) is someone with 3 to 5% cash to put down, plus has money for reserves, has a decent FICO score and a verifiable job or source of income. Shades of my parents!! These were the same guidelines when they purchased a home, or when I purchased my first home. 

 

Do these buyers exist? I’m sure they do!! I can’t wait to meet some of them!!!