Realtor.com Article
Myth 1: You need to put 20% down to purchase a home
One of the biggest myths is that homebuyers must put a minimum of 20% down. Only 36% of those surveyed were aware that you can put down much less.
“One millennial client was convinced he needed to save up for years to meet the 20% down requirement”
Another Gen Z client thought her student loans would prevent her from qualifying for a mortgage.
Myth 2: Interest rates are higher than ever
Ralph DiBugnara, president of Home Qualified, believes that growing up during the 2008 financial crisis scarred Gen Z and millennials.
“They came of age when there was a housing crash. But that was a completely different market that was overbuilt and overleveraged,” he says.
Younger generations also saw interest rates plummet during the first year of the COVID-19 pandemic.
“People are just kind of looking for 2% and 3% rates, and we may never see that again,” adds DiBugnara.
Alex Shekhtman, the CEO and Founder of LBC Mortgage, adds that he often encounters Gen Z and millennials “who believe interest rates are higher than ever.”
At least 54% of Gen Z and millennials surveyed said they thought mortgage rates were now at an all-time high.
Myth 3: You need to have stellar credit to qualify for a mortgage
Only 28% of Gen Z and millennials surveyed were aware that you can get a mortgage with a credit score in the 500s. But in reality, there are several loans you can qualify for with a FICO score in the “poor” to “fair” range.
“There are so many ‘experts’ now on social media and YouTube, and there’s so much information to get, that it’s harder to figure out what you really should be doing,” says DiBugnara.
Credit score myth busted.
