2 Major Myths Holding Back Home Buyers

2 Major Myths Holding Back Home Buyers | Simplifying The Market

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.

2 Major Myths Holding Back Home Buyers | Simplifying The Market

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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2460 E Main Street Unit G15 Mesa, AZ 85213

$13,300
1 Bed
1 Bath
600 SqFt
Status Active
MLS # 5964074
Property Type Mfg/mobile Housing
Price Type --
Nice Unit in the heart of Mesa! Take a dip in the heated community pool or spa. Join a game of cards, in the clubhouse. Meet your neighbors in the exercise room or out on the putting green. Play bocce ball or shuffle board. There is also a wood shop and access to public transportation. Why not relax on your beautiful covered patio? Resident qualifications apply.Bus stop outside of property, 1/2 mile to light rail, 1 mile to Safeway.

11411 N 91st Avenue Unit 99 Peoria, AZ 85345

$12,900
2 Beds
1 Bath
868 SqFt
Status Active
MLS # 5936923
Property Type Mfg/mobile Housing
Price Type --
Clean and Ready!!! This 2 bedroom, 1 bath is priced to sell! Located steps from Fabulous Clubhouse and Pool in 55+ Gated Resort Community.HOME FEATURES INCLUDE: Bright Living Room Spacious Kitchen, GAS Stove, Refrigerator Included Spacious Master Bedroom Washer & Dryer Central Air Conditioning Shady Porch Storage Shed Covered Car CarportRENT TO OWN PROGRAM AVAILABLE-Easy Qualification -Accept Cash as a source of Income -Low Down -Low Monthly Payments

16005 N 32nd Street Unit 119 Phoenix, AZ 85032

$10,000
1 Bed
1 Bath
2,572 SqFt
Status Active
MLS # 5934643
Property Type Mfg/mobile Housing
Price Type --
55+ Community for ALL Occupants. Purchase Cash or Seller Carry Options. Lot rent of 467.85/mo Community includes Pool and Rec Center. Close to great restaurants and shops. Easy access to the 101.

2460 E Main Street Unit D10 Mesa, AZ 85213

$7,000
2 Beds
1 Bath
550 SqFt
Status Active
MLS # 5959035
Property Type Mfg/mobile Housing
Price Type --
Nice home in Gated 55+ community! This resort community is in the heart of Mesa. 2 Bed 1 Bath, covered parking. Washer,dryer, refrigerator and shed included! Take a dip in the heated community pool or spa. Join a game of cards, in the clubhouse. Meet your neighbors in the exercise room or out on the putting green. Play bocce ball or shuffle board. There is also a wood shop and access to public transportation. Why not relax on your beautiful covered patio? Bus stop outside property, 1/2 mile to light rail, 1 mile to Safeway.

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