(StatePoint) Recent findings from a NeighborWorks America survey show a majority of consumers are still holding onto myths about barriers to home ownership including misconceptions about what it takes to buy a home.
Experts believe confusion about down payment requirements and lack of awareness about assistance programs are holding back many people from buying a home.
• The average millennial mistakenly thinks the minimum required down payment is 21.6 percent.
• Approximately 73 percent of all consumers and 62 percent of millennials said they were not aware of or are unsure about down payment assistance programs in their communities for middle-income homebuyers.
• Seventy percent of adults feel they don’t have enough money saved for a down payment.
“Before deciding if owning a home is right for you, take time to understand your down payment options, and separate myths from facts,” says Freddie Mac Vice President, Danny Gardner.
For example, the average down payment among first-time homebuyers in 2016 was just 6 percent and, for repeat buyers, just 14 percent. What’s more, mortgage options, such as Freddie Mac’s Home Possible Mortgages, make it possible for qualified borrowers to put down as little as 3 percent.
If your down payment is less than 20 percent with a conventional loan, you’ll have to pay private mortgage insurance, an added insurance policy that protects the lender if you are unable to pay your mortgage. However, mortgage rates remain at historic lows, providing you with a significant advantage.
There are also millions of dollars available for down payment assistance. A great place to start is right where you live. Many state, county, and city governments provide financial assistance for people in their communities who are well qualified and ready for homeownership.
To help demystify down payments and the homebuying process, free tools and resources are available at myhome.freddiemac.com
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