Two Big Myths in the Homebuying Process

By
Real Estate Agent with REMAX Realty Group Lic. # SL3154233

The 2020 Millennial Home Buyer Report shows how this generation is not really any different from previous ones when it comes to homeownership goals:

“The majority of millennials not only want to own a home, but 84% of millennials in 2019 considered it a major part of the American Dream.”

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:

“Millennials have to navigate a lot of obstacles to be able to own a home. According to our 2020 survey, saving for a down payment is the biggest barrier for 50% of millennials.”

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:

“A down payment of 20% for a home of that price [$210,000] would be about $42,000; only about 30% of the millennials in our survey have enough in savings to cover that, not to mention the additional closing costs.”

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):

buying a first house and need a realtor

Even today, many of the myths of the homebuying process are unfortunately keeping plenty of motivated buyers on the sidelines. In reality, it really doesn’t have to be that way.

information provided by KCM

Bottom Line

If you’re thinking of buying a home, you may have more options than you think, specially with the low home interest rates!

Your trusted Realtor Abby Stiller with REMAX Realty Group can answer your questions and help you determine your next steps.

Posted by

 

Abby Stiller 

Realtor® Lic. #3154233    

12 Years of Experience

RE/MAX Realty Group    Cape Coral Fort Myers Naples  Realtor Cape Coral      

 

I help Home buyers find their dream home & Homeowners sell for more. Thinking of buying or selling? Call/Text me: 239-284-8637   Your Honest & Dedicated Realtor!

or visit: www.TeamStiller.com

 

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Topic:
Home Buying
Location:
Florida Lee County Fort Myers
Tags:
realtor
loan officer
home buying process
low interest rates
preapproval letter
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Rainmaker
1,704,683
Bob "RealMan" Timm
Ward County Notary Services - Minot, ND
Owner of Ward Co. Notary Services, retired Realtor

Great information Abby Stiller . I'm finding that the key here is how to deliver the information. Millennials communicate entirely different than the Baby Boom generation. Our church is a great example of this during virus crises. Half the church thinks we need to take the church on line through programs I've never heard of and us baby boomers are saying hold the service in the church but stream the service for those who are scared to death of the information and disinformation out there.

Mar 19, 2020 12:53 PM #1
Rainmaker
515,845
Abby Stiller
REMAX Realty Group - Cape Coral, FL
Professional Bilingual Realtor (239) 284-8637

That so true Bob "RealMan" Timm These are different times for sure, but we all can embrace our knowledge and expertise to make our lives easier. Millennials are very tech and that can be handy right now with this coronovirus craziness. Our church is going to start doing the services online through FB every Sunday, as precautions.  Stay healthy my friend.

Mar 19, 2020 06:52 PM #2
Rainmaker
2,791,267
Brian England
Arizona Focus Realty - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

It is sad that people believe that to be true and they should definitely find out what options are available for them.

Mar 20, 2020 06:36 AM #3
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Rainmaker
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Abby Stiller

Professional Bilingual Realtor (239) 284-8637
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