2 Major Myths Hold Back Home Buyers

Dated: 01/30/2018

Views: 4



Urban Institute recently released a report entitled, “Barriers to Accessing Homeownership,” which revealed that eighty percent of consumers either are unaware of how much lenders require for a down payment or believe all lenders require a down payment above 5 percent.”

Myth #1: “I Need a 20% Down Payment”

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

Consumers are often unaware of the option to take out low-down-payment mortgages. Only 19% of consumers believe lenders would make loans with a down payment of 5% or less… While 15% believe lenders require a 20% down payment, and 30% believe lenders expect a 20% down payment.”

These numbers do not differ much between non-owners and homeowners; 39% of non-owners believe they need more than 20% for a down payment and 30% of homeowners believe they need more than 20% for a down payment.

While many believe that they need at least 20% down to buy their dream home, they do not realize that programs are available that allow them to put down as little as 3%. Many renters may actually be able to enter the housing market sooner than they ever imagined with programs that have emerged allowing less cash out of pocket.

Myth #2: “I Need a 780 FICO® Score or Higher to Buy”

Similar to the down payment, many either don’t know or are misinformed about what FICO® score is necessary to qualify.

Many Americans believe a ‘good’ credit score is 780 or higher.

To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans.

2 Major Myths Holding Back Home Buyers | Keeping Current Matters

As you can see in the chart above, 53.5% of approved mortgages had a credit score of 600-749.

Bottom 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.

#NEXTHOME #REALTOR #iChooseJared

Blog author image

Jared Anthony

As a full time professional real estate agent & former airline pilot, I pride myself on offering superior personal service before, during and after your transaction. Knowledge, commitment, honesty, ex....

Want to Advertise on this Site?

Latest Blog Posts

Did Tax Reform Kill The Luxury Market NOT SO FAR

The new tax code limits the deduction of state and local property taxes, as well as income or sales taxes, to a total of $10,000. When the tax reform legislation was put into law at the beginning of

Read More

Do Not Mess With Texas Its Population Is The Fastest Growing In The US

Texas and its strong business engine seem to be successfully wooing growing numbers of the population to its larger cities such as San Antonio, Dallas, and Fort Worth.According to a recent U.S.

Read More

Why Real Estate Is Everything I Love About Pride Month

Historically, the real estate industry has been — and continues to be — a bellwether for socio-political changeBY ELIZABETH ANN STRIBLING-KIVLANAs June is National Pride Month, I want to take a

Read More

Valero Faces Permit Fight Over Emissions At Houston Refinery

Enlarge San Antonio-based refining company Valero Energy Corp. wants to add hydrogen cyanide to the list of emissions from its Houston refinery. VALERO ENERGY CORP. IN THIS

Read More