Most Americans believe that saving for a down payment is their biggest obstacle to purchasing a home.
A recent survey by Ipsos Public Affairs and Wells Fargo & Company found the following:
While 64% of respondents said they are knowledgeable about how much of a down payment is needed to buy a home, nearly half (44%) also believe that a 20% down payment is required. In reality, there are loan programs with as little as 3% down, and even 0% down for qualified veteran purchasers.
More than a quarter of all loans this year had a 3% or less down payment.
When respondents were asked to list the biggest barriers to owning a home, lacking the funds needed for a down payment was among the top issues, especially for respondents aged 18-34. It’s no wonder if they think that a 20% down payment is a requirement!
64% of respondents believe they must have a “very good” credit score to buy a home. What may be surprising is the average credit score for approved FHA loans this year is 688, and that’s in the lower 40% of credit scores. While credit certainly is very important important and can help you score a better interest rate, it doesn’t lock you out of home ownership.
The decision to purchase a home shouldn’t be made lightly – and it shouldn’t be dismissed based on misperceptions either. Contact us if you want to learn more about what it takes (and what it doesn’t take) to purchase a home!