The misconception about down payments continue to hinder millennials from the possibility of owning a home.
An outlook study conducted by United Shore Financial Services along with Michigan State University found out that a whopping 96% of its respondents became more interested in purchasing a home after finding out that down payment could actually be the same as two months’ worth of rent.
Industry professionals at a recent Mortgage Bankers Association (MBA) conference cited the belief that a 20% down payment was required to get a mortgage as “the greatest cause of confusion among first-time homebuyers.” This was evident in United Shore’s survey, as 67% of millennials thought the 20% down was indeed necessary, while only 7% were aware that a down payment can be 5% or less.
“Millennials don’t need to put down 20% to buy a house,” said Brad Pettiford, communication strategist at United Wholesale Mortgage (UWM). “They don’t need to go to a bank to get a mortgage. There are several misconceptions that young people have about the homebuying process, and I think a big part of that is because of what we grew up hearing from our parents.”
Aside from the down payment misconception, other factors cited in the survey that discourage millennials from home owning include worrying about getting approved for a mortgage (67%); being intimidated with the responsibility of owning a home (63%); and fear of not paying mortgage on time (53%).
“A sizable portion of respondents thought that it costs more to use a mortgage broker instead of going directly to a bank or retail lender, which isn’t accurate,” said UWM President and CEO Mat Ishibia. “It seems counterintuitive to think it’s cheaper to add a ‘middleman’ to the process, but mortgage brokers are actually able to offer more competitive wholesale pricing to borrowers and aren’t held captive to one lender’s pricing or products. They truly can shop around to find the best deal for each borrower’s situation.”
Team Leader, The Tonnesen Team
Berkshire Hathaway HomeServices, Nevada
3185 St Rose Pkwy #100 Henderson, NV 89052
With over 30 years of experience helping families call Las Vegas "home!"
Related Blog Posts
The Tonnesen Team, Berkshire Hathaway’s #1 team in Las Vegas, is proud to present this single-family home for sale in Henderson, Nevada. 940 Marlberry Place with its red tile roof and 2 car garage sit on a large corner lot with a mature shade tree accenting its desert landscaping and a bubble drip sys...
We finally found a reputable lender with low fees and good rates that can do foreign national investor loans AND/OR loans on condo hotels. This is a "make sense" lender that can do portfolio loans outside the box. They have non warrantable condos and condo hotel financing for US citizens with 20% down payment, min...
We'd like to formally introduce you to our brand new "team member" Mia Johnson, daughter of Las Vegas Realtor Brandon Johnson and his wife Alicia, who was born on March 27th at 10:02 pm weighing in at 8 pounds even. We believe in training our agents right from the cradle, so Mia will be able to show homes, write contra...
Every year at this time, many homeowners decide to wait until after the holidays to put their homes on the market for the first time, while others who already have their homes on the market decide to take them off until after the holidays. Here are seven great reasons not to wait: 1. Relocation buyers are out there....
The median value of US homes has increased to $198,000 according to data from Zillow.The increase in April is 1% above the peak of 2007 ($196,600) and the year-over-year rise was 7.3% as tight inventory saw increased competition in many markets.However, comparing current conditions to a decade ago, Zillow’s chief...