What’s scaring buyers from becoming homeowners?

A survey conducted by Bankrate.com on renters have found that almost half have said they haven’t purchased a home yet because they believe their credit isn’t good enough to qualify for a mortgage or they can’t afford a down payment.

“A lot of people make assumptions that they can’t afford to buy based on just some perceptions, and many have not taken the step to figure out how mortgage-ready they are,” says Marietta Rodriguez, vice president of NeighborWorks America, a national home ownership programs.

Bankrate.com’s survey found that Hispanics are the ethnic group most likely to say that their credit is blocking them from home ownership. On the other hand, blacks and whites cited the main reason for not buying yet as they just weren’t ready to own a home yet.

Handing Over the Keys to A New Home

According to the survey, 35% of non-home owners say they don’t want to own a house yet. You can blame that on the still-lingering after-effects of the housing crisis, says Pava Leyrer, COO for Northern Mortgage Services in Grandville, Mich.

“A lot of people went through some deep pains in the past 10 years or less,” such as foreclosures, job losses, or bankruptcy filings, Leyrer says. “All of those things are traumatic in your life.”

Fear aside, many non-home owners are under the assumption that they need a higher down payment to purchase a house than is actually needed. About 20% of respondents to Bankrate’s survey said they need between 11% to 20% for a down payment, while 17% said they need 6% to 10%.

Nearly a quarter of non-home owners said, however, they “don’t’ know” how much they need for a down payment. Only 9% of respondents said they could do a 1% to 5% down payment.

Many non-home owners seem to lack awareness that they can get an FHA loan with just a 3.5% down payment or a conventional loan with a 3% down payment, says Rob Chrane, president and CEO at Down Payment Resource in Atlanta.

“The biggest single issue is that consumers just don’t know these programs even exist,” Chrane says. “If you don’t know of the possibility then you don’t know to ask people for help with it.”

If you have questions about financing or the steps- necessary to get you in your own home, please feel free to contact me.

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