The 2020 Millennial Home Buyer Report demonstrates how, in terms of homeownership aspirations, this generation is similar to earlier ones. Unfortunately, many potential buyers may be discouraged from entering the market due to misconceptions about the obstacles to homeownership, particularly those relating to down payments and FICO® ratings.
Whether you’re a millennial or not, it’s a good idea to start the debunking process by breaking down two of the largest falsehoods that might be preventing homeownership across all generations.
1. The 20% Down Payment
Many purchasers frequently overestimate what they need to get approved for a mortgage.
Per a report:
Only approximately 30% of the millennials in our poll had enough funds to afford a down payment of 20% for a property costing that much ($210,000), not to mention the additional closing charges.
Many prospective buyers still believe they must put at least 20% down on the home of their dreams, but they frequently need to be aware of the numerous aid programs that require as little as 3% down. Many renters may be able to enter the property market sooner than they ever thought possible with a little bit of study.
2. At Least 780 FICO Score
Along with down payments, purchasers sometimes mistakenly believe they need a credit score of 780 or higher to be approved for a mortgage.
According to Ellie Mae’s most recent Origination Insight Report, which focuses on recently completed (approved) loans, more than 50% of approved loans have a FICO® score attached to them.
Unfortunately, many persistent fallacies about house purchasing discourage many eager purchasers. It doesn’t have to be that way, in truth.
If you consider purchasing a property, you may have more alternatives than you realize. An experienced real estate agent may answer your questions and assist you in deciding what to do next.