The latest “How America Views Homeownership” survey by Wells Fargo shows that many Americans would like to be homeowners. Unfortunately, a number of them are held back by inaccurate notions about how to buy a home. We’ll begin by sharing the general results of the survey, which included 2,016 U.S. adults:
- 65% of respondents believe that homeownership is a proud accomplishment.
- 72% think that now is a good time to buy a home.
- 9 out of respondents10 prefer home ownership to renting.
Here’s where the misconceptions come in:
About 67% of potential buyers believe they needed a “very good” credit score to buy a home. They defined this as a score of 780 or better, which is much higher than necessary. For example, FHA mortgages allow credit scores in the mid-to-low 600’s.
36% of respondents assumed that a 20% down payment is always required. Again, this is higher than what is actually needed as a minimum. FHA loans allow down payments as low as 3.5%. Conventional loans now have down payment thresholds as low as 3%.
The 20% down payment comes into play when you wish to avoid mortgage insurance. See our blog post on the topic of Private Mortgage Insurance and Mortgage Insurance Premiums.
These responses echo the buyer confusion revealed by prior surveys. In a recent Housing Wire report, 42% of prospective home buyers said they knew very little about financing a home. We highlighted some of these earlier surveys in our April 30 blog, “Ignorance Isn’t Bliss When Buying a Home!”
Why do misunderstandings about the home buying process and mortgage financing persist? Likely because most real estate agents represent home sellers, and do little, if anything, to offer quality information to home buyers. Especially to first-time home buyers, who may be deemed as “unprofitable” clients. Even in cases of so-called buyer agency, few agents provide any type of financial guidance.
Fortunately, we’re here to clear up the confusion! We offer a free, no-obligation Buyer Conference that looks at your financing options. We explain the pros and cons of each mortgage program, and how each program affects your mortgage payment and closing costs.
We also help our Buyer-Clients evaluate financing offers, and identify the best lender and program for your individual needs. While most agents simply refer buyers to a lender, our fiduciary duty to you goes much farther!
As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax
