Misinformation hurts 1st-time homebuyers

I see this statement way too often. "People have a hard time qualifying for a mortgage because they cannot afford the 20% down payment." I see it in newspaper articles, which is unfortunate, but I also see it in articles written by industry insiders who should know better.

Wells Fargo recently conducted a survey of homebuying attitudes, and 44% think a minimum 20% down payment is needed to buy a home, and respondents cited a lack of these funds as one of the biggest obstacles to buying a home. This astounded me. The same survey showed 68% think now is a good time to buy a home, yet the previous stat suggests almost half of them are sidelined because they don't know they can qualify with as little as 3.5% down (and zero down for the military and for rural properties).

Another survey result that caught my eye is 64% of respondents think someone must have very good credit to buy a home. This one didn't surprise me as much because of media reports, but it still disappoints. The statement is true only when compared to the mid-aughts when lenders abounded for borrowers with 500 credit scores. Today, most lenders will accept credit scores of 620, which is truly fair credit, and I've seen a couple niche lenders that will allow as low as 580.

I encourage you to help me educate potential homebuyers, especially first timers. Let's get these folks back in the market. There are lots of good resources out there, and our Web site isn't a bad place to start.