The belief that a 20% down payment was necessary to get a mortgage was cited by 28% of respondents as “the greatest cause of confusion among first-time homebuyers,” while 41% of industry respondents said down payment was still a source of stress even for customers who were aware that a 20% down payment is not mandatory for purchasing a home.
“While first-time homebuyers continue to drive the purchase market, we believe many are staying on the sidelines due to the misconception that a 20% down payment is required to secure a mortgage,” said Rohit Gupta, CEO of Genworth Mortgage Insurance. “There are various low-down-payment options available today that allow prospective homebuyers to reach their dreams of homeownership sooner. It is crucial that, as an industry, we proactively educate eligible borrowers about solutions that will enable them to buy a home when they’re ready.”
39% of industry professionals also said consumers’ lack of knowledge about the homebuying process was another hindrance in achieving the dream of owning a home for first-time buyers, followed by a lack of inventory (28%), excess student debt (27%) and rising interest rates (6%).
A recent survey of industry professionals cited a lack of knowledge about the homebuying process and down payment as a roadblock for first-time homebuyers, according to Genworth Mortgage Insurance.