2 Major Myths Holding Back Home Buyers

Dated: 02/14/2018

Views: 64

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.

Want to Advertise on this Site?

Latest Blog Posts

2 Major Myths Holding Back Home Buyers

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

Read More

Your First Time Homebuyer Expert

According to a recent study, 47% of homebuyers are first-timers. Below are key characteristics of this group and what they're looking for in a home. Goals of buyingAbove all else, first-time

Read More

2018s Housing Market Is Off And Running What You Need To Know

2018's Housing Market Is Off And Running: What You Need To KnowEllen Paris ,CONTRIBUTORI write real estate news you can use Opinions expressed by Forbes Contributors are their own.Realtor

Read More