2 Major Myths Holding Back Home Buyers

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.

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.

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20066 N Golden Barrel Drive Surprise, AZ 85374

$464,000

2 Beds

2 Baths

1,936 SqFt

Status Active

MLS # 6612237

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Price Type --

''Welcome to this meticulously maintained single-owner residence, boasting an expansive layout that exudes an airy ambiance. Featuring two generously sized bedrooms, this home offers an entertainer's delight with its seamless open concept design. The kitchen is adorned with stainless steel appliances, ample countertop space, and abundant cabinet storage, complemented by a formal dining area. Additionally, the generously proportioned office/den presents versatility, potentially serving as a third bedroom. Step outside to the inviting back patio, perfect for unwinding and savoring the serene beauty of Arizona winters. Completing this exceptional property is a spacious two-car garage, providing ample storage and convenience.''

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811 E Gold Dust Way San Tan Valley, AZ 85143

$464,000

4 Beds

3 Baths

2,287 SqFt

Status Active

MLS # 6668067

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4431 W White Horse Boulevard Eloy, AZ 85131

$464,000

2 Beds

2.5 Baths

1,908 SqFt

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Property Type Single Family Residence

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PARTICALLY FURNISHED 2 bedroom, 2.5 bath, den & golf cart garage w/4 ft extension. 908 Sq Ft. & Built in 2018! Kitchen features quartz counters, highly upgraded cabinets w/hardware, SS appliances, Gas range & under cabinet lighting. You will love the Deco security door, large neutral tile flooring (carpet only in bedrooms), plantation shutters, den has a door for privacy, cabinets w/hanging rod in the laundry room. Guest bedroom has its own en-suite bathroom. Both Master & Guest rooms have bay windows, Quartz vanities & tile showers. Step out back to the extended South facing covered patio & enjoy the Arizona weather. Patio furniture, outdoor bench & TV in Den are gifts from the seller. PAID HOME WARRANTY to 12/29/24, will transfer to the buyer. Don't miss out on this one! Welcome home

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18782 E Elizar Drive Gold Canyon, AZ 85118

$463,995

3 Beds

2.5 Baths

2,070 SqFt

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Property Type Single Family Residence

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