I read an article in the Texas Realtor® magazine that highlighted several myths that may be stopping renters from pursuing home ownership. The data source for the article was from the 2018 Bank of America Homebuyer Insight Report. It’s unfortunate that these myths exist because any investigation would quickly show how incorrect they are.
49% of renters believe they must have a 20% down payment to purchase a home.
The truth is, there are mortgage programs that do not require a down payment at all or as little as a 3% down payment. Two of the most common no down programs are the VA Guaranteed Home Loans and USDA Home Loans.
VA Guaranteed Home Loan:
If you meet any of the requirements below you may be eligible for no money down.
If you have served 90 consecutive days of active service during wartime,
If you have served 181 days of active service during peacetime,
If you have more than 6 years of service in the National Guard or Reserves,
If you are the spouse of a service member who has died in the line of duty or as a result of a service-related disability.
USDA Insured Home Loan:
Eligibility for this program includes purchasing a home in a suburban or rural location defined as a USDA Eligible Area, and reasonable income limitations. This mortgage is the only mainstream zero money down program available to borrowers that have not served in the military. Eligible borrowers will find it difficult to find a home loan program that offers more favorable terms.
If you don’t qualify for these programs, there are other low down mortgages. FHA offers a 3.5% down and there are Conventional loan programs for as little as 3% down. To determine your eligibility for the best home loan program click Determine My Mortgage Eligibility and connect directly to a preferred lender that specializes in mortgage financing.
24% of renters believe they must have perfect credit.
The truth is, you do not have to have perfect credit to purchase a home. We are years past the financial crisis of the early 2000s, but there are still people in financial recovery. Add to this those devastated by recent natural disasters and you can see why so many people don’t have perfect credit.y must have perfect credit.
If your credit is not up to mortgage lending standards, it will not get better unless you take strategic steps to improve it. And since there are just as many myths about credit improvement as there are about home buying, consumers may unknowingly take steps that further damage their credit without the help of a trained professional.
If your credit is not acceptable, it’s wise to consult with a reputable Credit Specialists to advise you how to improve it? Another useful source to better understand credit is the Consumer Financial Protection Bureau (CFPB). The CFPB offers many useful consumer tools to help manage finances, purchase a home, etc.
Buying a home is something you should undertake using the best possible resources available to you. As a National Association of Realtors® Accredited Buyer’s Representative®, I’m one of those resources.