Urban Institute recently released a report entitled, “Barriers to Accessing Homeownership: Down Payment, Credit, and Affordability,”which revealed that,
“Consumers often think they need to put more money down to purchase a home than is actually required. In a 2017 survey, 68% of renters cited saving for a down payment as an obstacle to homeownership. Thirty-nine percent of renters believe that more than 20% is needed for a down payment and many renters are unaware of low–down payment programs.”
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:
“Most potential homebuyers are largely unaware that there are low-down payment and no-down payment assistance programs available at the local, state, and federal levels to help eligible borrowers secure an affordable down payment.”
These numbers do not differ much between non-owners and homeowners. For example, “30% of homeowners and 39% of renters believe that you need more than 20 percent for a down payment.”
While many believe that they need at least 20% down to buy their dream homes, they do not realize that there are programs available which 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, 51.7% of approved mortgages had a credit score of 600-749.
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.
Just as understanding your mortgage options can simplify the home-buying process, knowing the right selling options can make the selling journey just as smooth. If you’re looking to sell your property quickly and without the usual complications, working with a cash buyer who buys houses as-is can be a great choice.
Whether your home needs repairs or you have a unique property like one with an unpermitted ADU, a cash buyer can offer you a fast and hassle-free transaction. With this option, you don’t need to worry about staging, inspections, or waiting for financing approval.
To get started, simply reach out to trusted cash buyers who specialize in purchasing homes in their current condition, and you could be on your way to closing in as little as a few days, freeing you from the stress and uncertainty of traditional real estate sales.
If you’re interested in purchasing or selling a home you can start by Contacting Us directly or start searching for your new home here
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