Do you know the basics of home buying? Check! Do you consider yourself financially responsible? Of course! Do you have a rainy day fund? Um, duh. Do you think it’s a good time to buy a home? Yes! It turns out that the majority of Americans (even millennials) answer in the affirmative to all of these questions, and more.

However, in a national survey just released by Wells Fargo and IPSOS Public Affairs it’s obvious that average Americans think they know more than they really do about homes and home buying. And the result is this: myths of home buying and home ownership keep otherwise well qualified home buyers from seriously considering purchasing a house. Read on to see how much you really know!

 What the Study Shows

Though people generally look positively on home buying and home ownership, their actual knowledge about the process of purchasing a home impedes their own dreams of attaining one. So what do people know about the process? And what are they missing?

• One thing that’s on spot is that buying is preferable to renting. Few respondents said that they would rather rent than buy. Most saw buying a home as a sound investment and a good goal, and yet many respondents were misinformed about the basics of home buying including issues of credit, mortgage, and down payments.
• More than half of respondents said that they felt they were knowledgeable about down payments, yet almost half thought that they had to put 20% down when buying a home. This shows that the general public is, in fact, misinformed about down payments. Though there are some loan types that require 20% down, many loans allow for a much smaller percent up front.
• More misinformation exists about credit scores with almost 2/3rds of those studied believing that an individual must have a very good credit score in order to buy a home.
• Many respondents believed that only those with high incomes could qualify to buy a home—and that it is very difficult to qualify for a mortgage. Veteran homebuyers can tell you firsthand that this just isn’t true!

The Reality of the Situation

With so many myths out there about credit scores, down payments, and mortgage basics, what should the public become more aware of when considering investing in a home?

The report shows that the biggest concerns about home buying include affordability and having enough funds for a down payment, and yet respondents were woefully uneducated about the type and varieties of mortgages available for them. Respondents who already rent or own a home were more likely to understand different mortgage types, but still only 5% of respondents had ever heard of a 3 step refinance mortgage, 17% a renovation loan, 19% a 5/1 adjustable rate mortgage, and 21% a jumbo mortgage—and this from the same population which overwhelmingly declared that they’re knowledgeable when it comes to deciding on the right mortgage.

The Low Down

Though the general population is becoming more and more fiscally responsible (thanks to the economic downturn), Americans are less sure of their ability to invest in real estate than they should be! Researching different loan types, talking to your REALTOR or loan specialist, and boosting your confidence in your own buying ability will help you attain your dream of home ownership. And those surveyed are right in that aspect—it is a meaningful investment, what they seemed to have missed is how attainable it really is.

However, in a national survey just released by Wells Fargo and IPSOS Public Affairs it’s obvious that average Americans think they know more than they really do about homes and home buying. And the result is this: myths of home buying and home ownership keep otherwise well qualified home buyers from seriously considering purchasing a house. Read on to see how much you really know!

What the Study Shows

Though people generally look positively on home buying and home ownership, their actual knowledge about the process of purchasing a home impedes their own dreams of attaining one. So what do people know about the process? And what are they missing?

• One thing that’s on spot is that buying is preferable to renting. Few respondents said that they would rather rent than buy. Most saw buying a home as a sound investment and a good goal, and yet many respondents were misinformed about the basics of home buying including issues of credit, mortgage, and down payments.
• More than half of respondents said that they felt they were knowledgeable about down payments, yet almost half thought that they had to put 20% down when buying a home. This shows that the general public is, in fact, misinformed about down payments. Though there are some loan types that require 20% down, many loans allow for a much smaller percent up front.
• More misinformation exists about credit scores with almost 2/3rds of those studied believing that an individual must have a very good credit score in order to buy a home.
• Many respondents believed that only those with high incomes could qualify to buy a home—and that it is very difficult to qualify for a mortgage. Veteran homebuyers can tell you firsthand that this just isn’t true!

The Reality of the Situation

With so many myths out there about credit scores, down payments, and mortgage basics, what should the public become more aware of when considering investing in a home?

The report shows that the biggest concerns about home buying include affordability and having enough funds for a down payment, and yet respondents were woefully uneducated about the type and varieties of mortgages available for them. Respondents who already rent or own a home were more likely to understand different mortgage types, but still only 5% of respondents had ever heard of a 3 step refinance mortgage, 17% a renovation loan, 19% a 5/1 adjustable rate mortgage, and 21% a jumbo mortgage—and this from the same population which overwhelmingly declared that they’re knowledgeable when it comes to deciding on the right mortgage.

The Low Down

Though the general population is becoming more and more fiscally responsible (thanks to the economic downturn), Americans are less sure of their ability to invest in real estate than they should be! Researching different loan types, talking to your REALTOR or loan specialist, and boosting your confidence in your own buying ability will help you attain your dream of home ownership. And those surveyed are right in that aspect—it is a meaningful investment, what they seemed to have missed is how attainable it really is.

My husband and I are looking at a house that has an HOA, but we never lived with one before so we are curious to know if there are benefits to having one. I liked how you pointed out that one good thing is that they will provide a landscape company to help with the yard work. It will be great not having to worry about spending all of our time doing it, but having it still look nice.

Very nice love the colors

I would love to have a tiny home to live in! It seems more manageable and affordable. The Hiatus in Oregon is beautiful. I love the wood floors. can you put a tiny house on any property? Thanks for the inspiration and information!

I have a home in Stamford CT and I am looking for someone to assume my mortgage. Not sure if you are interested in something like this based on what I saw on your website. Eric

Is it possible to buy a first home with a 580 credit score? The house is in Groton ct and is only $90,000