(BPT) – Millennials are often called “perennial renters,” yet studies show they are not only planning to own a home one day, but they expect to own multiple throughout their lifetimes. Many people incorrectly assume these “boomerang kids” are moving home due to laziness when they’re actually doing it to save.
According to the recent Bank of America Homebuyer Insights Report, 64 percent of parents with adult children living at home do not charge them monthly rent/bills, allowing their millennials to save. Yet, even with some savings in hand, common homebuying misconceptions continue to create barriers to ownership. Here are the top myths keeping millennials in their parents’ basements:
1) I need to have a 20 percent down payment.
Almost half of first-time buyers believe they need 20 percent or more for a down payment, but that just simply isn’t true today. Creditworthy buyers may be able to qualify for loans that require as little as 3 percent down, with no private mortgage insurance.
2) I must have a perfect credit score.
While your credit score is very important, it by no means needs to be perfect. There are programs available that help responsible and worthy buyers get into homes with non-traditional forms of credit. It’s important to pay your bills on time and check your credit score regularly, to understand how you’ll be viewed as a potential borrower.
3) I should skip the starter home and buy my forever home.
Many first-time buyers want to put off buying a starter home to save for their dream home. Today’s millennials are learning that it’s beneficial to buy what they can afford now. Sixty-eight percent of millennial homeowners say their current home is a “stepping stone” to their forever home.
4) I need to be married before buying a home.
Don’t let your marital status keep you from loving where you live and beginning to earn equity from it. According to the Joint Center for Housing Studies, more than one in five homebuyers is a single woman, and this trend is on the rise.
5) I won’t qualify for down payment assistance.
According to NeighborWorks America, 62 percent of millennials are unaware of the down payment assistance programs available for middle-income homebuyers. Don’t assume you won’t qualify — tools like the Down Payment Resource Center give you access to over 1,300 down payment and closing cost assistance programs across the country.