Survey: Downpayment Confusion Keeps People From Homeownership – NMP Skip to main content

Survey: Downpayment Confusion Keeps People From Homeownership

Phil Hall
May 19, 2017
The median home will be worth $6,275 more a year from now, according to new data released by Zillow

Would-be homebuyers are most frequently deterred from pursuing the American Dream due to misperceptions about downpayments, according to a survey of mortgage professionals conducted by Genworth Mortgage Insurance.
In a poll of 150 industry professionals conducted during the recent Mortgage Bankers Association Secondary Conference, 39 percent of respondents a general lack of knowledge about the homebuying process was among the greatest impediments to first-time homebuyer demand. Also cited was the lack of inventory (28 percent) and excess student debt (27 percent); rising interest rates came in far behind at six percent.
 
However, the greatest cause of confusion among first-time homebuyers involved the 20 percent downpayment: 28 percent of respondents stated that borrowers still mistakenly believe that this is a requirement for purchasing a home, thus keeping them out of the homeownership sphere. Forty-one percent of industry executives surveyed said that even among prospective borrowers who realize the 20 percent downpayment is not mandatory, there is still a prevalent belief that it would be difficult to get into a house with less.
 
“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 percent downpayment is required to secure a mortgage,” said Rohit Gupta, CEO of Genworth Mortgage Insurance. “There are various low downpayment 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.”

 
Published
May 19, 2017
Bankruptcy Court Judge OKs Financing For FGMC

Financing package will allow FGMC to continue to fund loans in its pipeline.

Industry News
Jul 05, 2022
Opteon Acquires Northeastern Appraisal Associates

This is the fourth acquisition Opteon has made in the last 12 months. 

Industry News
Jul 04, 2022
Lenders Complain FGMC Is 'Radio Silent' On Loans

Company said it would stop purchasing new loans in the wake of its mass layoff last week; seeking court-approved financing.

Industry News
Jun 30, 2022
AnnieMac Home Mortgage Acquires OVM Financial

Wants to expand its outreach into the Mid-Atlantic region.

Industry News
Jun 30, 2022
Ready Life Launches Black-Owned Fintech To Help Underserved Borrowers

Ready Life, led by two Black entrepreneurs, is taking aim at the racial wealth gap by starting a mortgage fintech.

Industry News
Jun 30, 2022
FGMC Files For Chapter 11 Bankruptcy Protection

FGMC notified laid-off 471 employees late Tuesday night that it would pay severance.

Industry News
Jun 30, 2022