The key fact that renters have all wrong
When it comes to homeownership, knowledge is key. That’s why I was so disturbed by a recent study that showed just how misinformed many potential homebuyers are.
A recent report from the National Association of Realtors (NAR) found that 87 percent of non-homeowners believe that they need to put down at least 10 percent in order to buy a home. However, that’s simply not true. Many Americans put down less; in fact, the median down payment for first-time buyers is 6 percent, NAR points out.
How many people with the income and credit requirements to buy a home are putting off doing so because they don’t believe they have enough for a down payment? Since these people don’t know about all of the options that are available to them, they are effectively denying themselves the realization of the dream of homeownership.
Not only does this misinformation hurt consumers, but it hurts the entire industry. The mortgage industry is missing out on high quality customers because so many potential homebuyers simply don’t have enough knowledge about how the homeownership process works.
While it’s important that we focus on providing financial education to those who have work to do to improve their credit and prepare for homeownership, we must also provide education to those who are ready. We must let them know that they have options, and the dream of homeownership may be closer than they think.
In order to get this message across, homeownership education must become a priority for everyone connected to the mortgage industry, from lenders to realtors. We must urge potential homebuyers to take a class or sit with a homeownership counselor. In doing so, we will have many more well-prepared homebuyers to service.
There are clearly barriers to homeownership that many people encounter. Let’s not allow miseducation to be one of them.