Potential Home Buyers Sidelined by Misconceptions

Lack of knowledge and misinformation may be discouragingrnAmericans from buying a home according to a recent survey sponsored by WellsrnFargo &Company.  The survey,rnconducted in June by Ipsos Public Affairs, found that many prospectivernhomebuyers do not take the plunge because of uncertainty about their ability tornqualify for a mortgage or about navigating the homebuying process.</p

Thernsurvey, “How America Views Homeownership,”rnfound that many Americans say their financial houses are in order.  Eighty percent said they know how to handlerntheir personal financial affairs and 82 percent claim they generally don’trnspend beyond their means.  Only 27rnpercent said that they tend to spend their money and not think twice about it.  Sixty-three percent, including more than halfrnof the millennials (ages 18 to 34) in the survey, said they have a “rainy dayrnfund.”   These factors, the bank says,rnall improve on the ability to buy a home.</p

“Althoughrnthe homebuying process has changed in many ways in recent years, our surveyrnfound Americans still view homeownership as an achievement to be proud of andrnmany believe that now is a good time to buy a home,” said Franklin Codel, headrnof Wells Fargo Home Mortgage Production.</p

When it comes to buying a house 74rnpercent of respondents surveyors that they “know and understand” the financialrnprocess involved, but other responses indicated that this may not really be therncase.  For example, Wells Fargo said that, whilern68 percent of Americans feel it is now a good time to buy, almost a third – 30 percentrn- of survey respondents think that onlyrnindividuals with high incomes can obtain a mortgage and 64 percent believe thatrnsomeone must have a “very good” credit score to buy a home. </p

The survey found that while 64rnpercent claimed to be knowledgeable about downpayment requirements, 44 percentrnthink that a minimum of 20 percent is required and a lack of these funds wasrncited by respondents as one of the biggest barriers to owning, especially forrnmillennial respondents, age 18 to 34. rnForty-four percent also admitted to knowing little or nothing aboutrnclosing costs for a home purchase and about half said they feel they lack accessrnto homes that meet their needs financially.</p

All of this, the bank says, pointsrnto the need for more homebuyer education. rn”Our survey also suggests we have an opportunity as lenders, nonprofitrnagencies and real estate agents to better inform Americans about creditrnratings, mortgage costs and housing affordability,” Codel says.  “This would help demystify the homebuyingrnexperience for many consumers.”</p

“It is important for prospectivernhomebuyers to feel empowered to ask lenders and real estate agents questionsrnabout available options, such as down payment assistance or FHA loan programsrnor VA loans for veterans,” he continued.  “Ninety-five percent of survey respondentsrnsaid they want to own a home if they don’t already. Informing prospectivernhomebuyers about their options is the first step toward helping them realizerntheir goals.”</p

The Well Fargo/Ipsos Public Affairsrnpoll was conducted from June 3-16, 2014 with 2,017 adults.  They were interviewed on-line and the data were weighted to ensure that thernsample’s age/sex composition reflects that of the actual U.S. populationrnaccording to Census information.

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