Some potential buyers face roadblocks on the road to homeownership. But according to a recent report from Urban Institute, many of those roadblocks are self-created in the form of misconceptions about what it takes to purchase a home.
According to the report, a whopping 80% of are either unaware of how much is required for a down payment or believe they need to save 5% or more of the total purchase price in order to make a purchase (with 50% believing a lender either expects or requires a 20% down payment in order to approve a mortgage).
This information, of course, is false. There are plenty of lenders out there that will approve loans with either no or an extremely low down payment (in fact, according to the National Association of Realtors' Realtors Confidence® Index , 61% of first-time buyers in 2017 made a down payment of 6% or less.)
With so many potential buyers out there operating with false information, it's no wonder so many renters (53%, according to the Urban Institute Report) consider saving for a down payment a major obstacle on the way to homeownership.
The Takeaway
If you're considering buying a home but holding back because you don't think you can afford a down payment, do some research. Look for no or low interest payment lending options like FHA loans. The reality of owning a home might be closer (and more affordable) than you think!