The Millenials are no different from the previous generation when it comes to the dream of homeownership. 84% of millennials consider it part of the American Dream, according to the 2020 Millennial Home Buyer Report.
There are some hurdles for these Millenials that are different from prior generations. Millennials often face high student loan payments that inhibit their ability to save for a downpayment and can adversely affect their ability to repay a mortgage. Also, they are getting married at a later age. Married couples are almost 20% more likely to own a home, according to Urban Wire
There are several myths about homeownership that keep Millennials and others from buying a home. Let’s get rid of two of these falsehoods.
Falsehood #1: “You have to have a 20% down payment.”
If you are a first-time homebuyer, FHA loans required as little as 3.5% downpayment. As a veteran of the United State Armed Services, you may qualify for a VA loan with nothing down
Many potential buyers still believe this myth and are not aware of loan assistance programs like FHA, VA, and others.
If you do a little research and talk with a loan originator, you may purchase that home much earlier than you thought.
Falsehood #2: “I Need a FICO® Score of 750 or Higher.”
While having a high FICO score dows in many cases, help you get approved for a mortgage, it is not mandatory. Almost 50% of mortgage loans go to people with FICO scores under 750, and more than 20% go to people with scores in the 600’s according to the latest Origination Insight Report.
The minimum accepted score for most conventional loans (those that aren’t backed by the government) is 620, but options exist (like FHA loans) that let you qualify with a score as low as 580.
These falsehoods or others can sideline potential homebuyers. It does not have to be that way. Talking with a real estate agent should be your first step towards homeownership. Get the facts and move on from there.