Two Big Myths in the Homebuying Process
Two Big Myths in the Homebuying Process
![]() The 2020 Millennial Home Buyer Report shows how this generation is not really any different from previous ones when it comes to homeownership goals:
Unfortunately, the myths surrounding the barriers to homeownership – especially those related to down payments and FICO® scores – might be keeping many buyers out of the arena. The piece also reveals:
Millennial or not, unpacking two of the biggest myths that may be standing in the way of homeownership among all generations is a great place to start the debunking process. Myth #1: I Need a 20% Down Payment
Many buyers often overestimate what they need to qualify for a home loan. According to the same article:
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 bit of research, many renters may 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 they need a credit score of 780 or higher. Ellie Mae's latest Origination Insight Report, which focuses on recently closed (approved) loans, shows the truth is, over 50% of approved loans were granted with a FICO® score below 750 (see graph below): Bottom LineIf you're thinking of buying a home, you may have more options than you think. Let's connect to answer your questions and help you determine your next steps. |
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