2 Myths Holding Back Home Buyers

Dated: November 18 2019

Views: 2

n a recent article, First American shared how millennials are not really any different from previous generations when it comes to the goal of homeownership; it is still a huge part of their American Dream. The piece, however, also reveals,

 “Saving for a down payment is one of the biggest obstacles faced by first-time home buyers. Dispelling the 20 percent down payment myth could open the path to homeownership for many more.”

 Myth #1: “I Need a 20% Down Payment”

Buyers often overestimate how much they need to qualify for a home loan. According to the same article:

“Americans still overestimate the qualifications needed to get a mortgage, resulting in qualified potential buyers not even considering homeownership. Indeed, the Urban Institute report revealed that 16 percent of consumers believed that the minimum down payment required by lenders is 20 percent or more, and another 40 percent didn’t know at all.”

While many potential buyers still think they need to put at least 20% down for the home of their dreams, they often don’t realize how many assistance programs are available with as little as 3% down. With a little research, 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”

In addition to down payments, buyers are also often confused about the FICO® score it takes to qualify for a mortgage, 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, 50.23% of approved mortgages had a credit score of 500-749.

Bottom Line

Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Believe it or not – your dream home may already be within your reach.

Blog author image

Keith Lipari

Who you work with matters. The Lipari Group is a Real Estate team dedicated to providing our customers with the perfect blend of expert experience, market knowledge, and a client-focused mentality. We....

Latest Blog Posts

14 Property Tips To Do And Avoid That All Homeowners Should Be Aware Of

So you finally got that perfect house and now its time to make it your home!  Many homeowners spend a great deal of time, effort and money to make their new house a home with their own

Read More

First Time Home Buyers Programs In Our Area

PHFA offers homebuyers the opportunity to receive free homebuyer counseling and education through one of its approved counseling agencies. PHFA requires borrowers with a FICO credit score

Read More

I Want To Buy A House, Now What do I do?

Dated: 10/28/2019Views: 465Over the next few weeks, I will be posting a series of posts geared towards first time home buyers. These articles will answer some of the most frequently asked

Read More

Home Buying Myths Vs Reality

Purchasing a home is, for many people, the largest investment of their lives.  It can be overwhelming and many people struggle with where to start.  There are many myths about buying a

Read More