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2 Myths Holding Back Home Buyers

Monday, June 10, 2019   /   by Amy McLeod

2 Myths Holding Back Home Buyers

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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.


As 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.


Starting the search for your new home? Let the professionals with The McLeod Group Network help you find your dream home! 971.208.5093 or admin@mgnrealtors.com.


By: KCM Crew



  amy mcleod, mcleod group network, homebuyers, buying a house, first time home buyers, homeownership, down payment, credit score

The McLeod Group Network - KW Capital City
Amy McLeod
1900 Hines St SE, Suite 220
Salem, OR 97302
971-208-5093
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Lighthouse Mortgage
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110 Wallace Rd. NW
Salem, OR 97304
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Homeside Mortgage
Sales Manager, AVP
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Aaron Memmott
Finance of America
Mortgage Advisor
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NMLS# 1048117
Direct: (503) 718-9876
Cell: (503) 551-1115
Fax: (855) 639-2956

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Elizabeth Smith
Caliber Home Loans
elizabeth.smith@caliberhomeloans.com
NMLS# 228191
Cell: 503-910-0415
eFAX: 844-538-4687

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