2 Myths Holding Back Home Buyers

Dated: June 10 2019

Views: 150

Freddie Mac recently released a report entitled, “Perceptions of Down Payment Consumer Research.” Their research revealed that,

“For many prospective homebuyers, saving for a down payment is the largest barrier to achieving the goal of homeownership. Part of the challenge for those planning to purchase a home is their perception of how much they will need to save for the down payment…

…Based on our recent survey of individuals planning to purchase a home in the next three years, nearly a third think they need to put more than 20% down.”

Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate the funds needed to qualify for a home loan. According to the same report:

22% of renters and 31% of homeowners believe lenders require 20% or more of a home’s sale price as a down payment for a typical mortgage today. And,

“If a 20% down payment was required, 70% of those who were planning to buy a home in the next three years said it would delay them from purchasing and nearly 30% indicated they would never be able to afford a home.”

While many believe at least 20% down is necessary to buy the home of their dreams, they do not realize programs are available which permit as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined!
Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Many either don’t know or are misinformed concerning the FICO® score necessary to qualify, believing a ‘good’ credit score is 780 or higher.

To debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.2 Myths Holding Back Home Buyers | MyKCMAs indicated in the chart above, 52.4% of approved mortgages had a credit score of 600-749.
Bottomx Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.

« What is the Cost of Waiting Until Next Year to Buy? [INFOGRAPHIC]

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
Blog author image

Jill Caldera

Real Estate is an ever-changing industry and having confidence in an agent is a must because when you are better informed you make better decisions. Your agent should be KNOWLEDGEABLE about the curr....

Latest Blog Posts

Could Rising Home Prices Impact Your Net Worth

Could Rising Home Prices Impact Your Net Worth?This past year has had a pronounced effect on the housing market. Low home inventory and high buyer demand have driven home prices to an all-time

Read More

New Home for Your Next Stage of Life

Finding a New Home for Your Next Stage of Life03 May 2021  by Twinkle RobinsonImagine the first place you lived as a young adult. Now imagine trying to fit your life today into

Read More

Can I Buy or Sell a Home Without a Real Estate Agent

Can I Buy or Sell a Home Without a Real Estate Agent?01 Apr 2021  by Twinkle RobinsonToday’s real estate market is one of the fastest-moving in recent memory. With record

Read More

Is The Real Estate Market Going To Crash

Is the Real Estate Market Going to Crash?01 Mar 2021  by Twinkle RobinsonWhile many areas of the economy have contracted, the housing market has stayed remarkably strong. But can

Read More