Facts vs. Myths About First Time Home Buyers

June 15, 2020

Owning a home is the ultimate American dream. But sadly, more than half of people who don’t already own a home think it will be difficult for them to buy based on their current financial situation.  We want to change these numbers by addressing common myths which often prevent people from starting the process.

Myth: It’s hard to get your first mortgage.

Studies confirm what we have been hearing for years: many people don’t believe they’ll qualify. In fact, 57% of non-owners stated they believe it would be at least somewhat difficult to become a homeowner based on their current financial situation.

Fact: 33% of all home buyers in 2019 were first time home buyers!

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Myth: I can’t buy a home unless I currently rent.

Many people mistakenly assume that they can’t purchase a home unless they’ve been renting for some time.

Having a verifiable rental history does help when it comes to getting a home loan for the first time. However, it is not a requirement for all programs.

Talk to one of our loan officers to find out which programs may allow you to purchase even without rental history.

Fact: 74% of first-time home buyers are current renters but 26% currently live rent free with someone else.

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Myth: I’ll need a big down payment.

Concerns about down payments often stop people from inquiring about a home loan. However, there are several low and no-down payment home loan programs available to first-time home buyers including:

Programs and requirements may vary based on your location. Get in touch with a loan officer near you for more details.

Fact: First-time buyers typically ?nance 94% of their home.

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Myth: It’s too hard to save for a down payment or reserves.

Saving for a down payment can feel like a daunting task for many people given their car loans, student debt and other financial obligations.

There is also the reality that once you buy a home, you are the one responsible for the costs of home ownership. That is why it’s important to have a bit of money saved for home maintenance or repairs.

If you’re struggling to save money as a first time home buyer, you are NOT alone! Talk to one of our loan officers to find out exactly how much money you will  need to purchase a home.

Remember, once you buy your first home, you’ll be able to use your equity from that home towards future home purchases. In fact, more than 60% of ALL home purchase transactions rely on proceeds from the sale of a prior home.

Fact: 27% of first-time buyers used a gift

Just the Facts Please!

We hope that you won’t let fear or myths get in the way of pursuing your dream of owning your own home.

Our team of lending professionals is here to answer your questions and give you the facts about which lending programs may be available to you based on your credit and finances as well as the area you’re looking to buy. Getting pre-qualified is perhaps the best way to get the facts about what you can afford and how much cash you’ll need. Find a loan officer near you to start the process today!

 

Data Source: 2019 Profile of Home Buyers and Sellers from NAR