Contact Us Now! Ask Us Anything
480-470-8505 Call Us Today

The 2 Myths Holding Back Home Buyers

Dated: 06/09/2019

Views: 50

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.

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.

Blog author image

Curtis Johnson

Curtis is a Best Selling Author, the Founder and CEO of The Curtis Johnson Team Powered By eXp Realty, where he runs a dynamic Real Estate Team having sold 5,000 residential homes. The Wall Street Jou....

Latest Blog Posts

Seniors Are on the Move in the Real Estate Market

Did you know August 21st is National Senior Citizens Day? According to the United States Census, we honor senior citizens today because, “Throughout our history, older

Read More

Housing Supply Not Up with Population Increase

Many buyers are wondering where to find houses for sale in today’s market. It’s a true dilemma. We see an increase in buyer demand, but the supply available for purchase isn’t

Read More

A Great Way to Increase A Family’s Net Worth

Every three years, the Federal Reserve conducts its Survey of Consumer Finances. Data is collected across all economic and social groups. The latest survey data covers 2013-2016.The

Read More

Buying a Home: Do You Know the Lingo? [INFOGRAPHIC]

Some Highlights:Buying a home can be intimidating if you’re not familiar with the terms used throughout the process.To point you in the right direction, here’s a list of some of the most

Read More