Today I’m debunking two commonly held myths that millennials have about home buying.

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I had a situation that came up this weekend with a young couple who came along to a showing with their parents. I wanted to take some time to debunk two commonly held myths among millennial homebuyers.

  1. You need to pay more than 20% down on your purchase. This couple was looking at a $500,000 condo last weekend. They were only 27 years old and believed they needed to put 20% down on the condo before they could buy it. The thing is, 20% of the purchase price is $100,000. That’s quite a bit of money, especially for this couple.

What I suggested was against the father’s advice, but that they should strive to put 10% down on the condo. Now, of course they’ll have to pay the mortgage insurance because they’re coming in with less money, but the payment would only be an additional $247 per month instead of waiting and coming up with the additional $50,000.

If you can’t make a 20% down payment, talk to a lender about other options.

Ideally, you’d want to come up with the 20% down payment, but if that isn’t immediately feasible, the best option is to talk to a lender and see if you can come to an agreement to pay less of a down payment so that you can get into the home quicker instead of waiting to save that additional money.

  1. Many millennials are under the impression that you need to have a credit score of more than 780 to qualify for any home loans. While that is a great credit score, the reality is that 54% of people have a credit score that is less than that.

There are many different types of loan programs that allow you to qualify for financing with a credit score that is lower than 780. Granted, you probably won’t qualify with a 500, but if your credit is higher than 640, most lenders can work with you.

If you have any more questions about this topic or you’re looking to buy or sell a home, please feel free to reach out to me. I’d be happy to help!

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