Wells Fargo is proud to be title sponsor of The Washington Informer’s Financial Literacy supplement.
As a responsible lender, Wells Fargo is dedicated to making sure our customers have the information they need to help make informed financial decisions. As we observe Get Smart About Credit throughout the month of October, we feel it’s a great time to remind consumers about the importance of knowing the facts when it comes to obtaining credit.
Whether a consumer is interested in obtaining a credit card or getting approved for purchases such as a home or car, knowing what is required and understanding the loan terms can help lead to solid planning and preparation for approval.
Wells Fargo’s 2015 How America Views Homeownership survey shows that there is a need for consumers to increase their financial literacy when it comes to the process for loan approval. While many consumers want to own a home and 80 percent of respondents say they know and understand the financial process involved in purchasing a home, there are still misperceptions about what it takes.
One of the most persistent misperceptions in home lending is about the amount of money required for a down payment. The general population reported that a 20 percent down payment is not required to purchase a home. However, in the survey 58 percent of African Americans and 55 percent of Hispanics responded that they believe 20 percent is required, perhaps reflecting long held beliefs, or practices in competitive housing markets.
The fact is there are a number of mortgage programs that allow borrowers to put down as little as 3.5 percent. Some programs, such as Veteran’s Administration and Rural Development, require no down payment for qualified borrowers and there are a host of downpayment assistance programs offered by local and state housing finance agencies that may be available for potential homeowners.
There is also some misperception about credit score. While credit score alone does not determine mortgage approval, it is an important factor. In the survey, 67 percent of respondents believe they need a very good credit score to purchase a home, with nearly half (45 percent) thinking a good credit score is over 780. A credit score of 780 is generally considered excellent while a score over 660 is considered good and may be high enough for loan approval.
Talking to a reputable lender like Wells Fargo can help consumers make sure they have the right information to not only get prepared but also make informed financing choices There are also resources online that consumers can use to educate themselves. For example, Wells Fargo’s My FirstHomeSM is a free, online education program that takes a potential homebuyer through all aspects of the homebuying process. For more information about Wells Fargo Home Mortgage or to find a local home mortgage consultant consumers can visit www.wellsfargo.com/mortgage, call 1-877-937-9357or visit one of our home mortgage or many bank store locations.