Think you can’t buy a home? Think again

The Rob Ellerman Team at ReeceNichols
The Rob Ellerman Team at ReeceNichols
Published on February 2, 2022

We recently read a survey of young Americans who want to buy homes but think they can’t. Their reasons for feeling this way are a bit shocking.

We assumed the number one reason they feel they can’t buy a home is because of the current, overheated market with rapidly escalating prices. That isn’t the case however.

So, today we unwrap the misconceptions and challenge them.

Misconception number one: To get a mortgage you must pay at least 10% for a down payment

We found this surprising mainly because the myth we hear most often is that down payments must be 20%. Where this group of young homebuyers came up with 10% is anyone’s guess.

The truth?

Down payment requirements range from zero to the sky-is-the-limit. The Veterans Administration-backed home loan and the USDA Rural Development program’s mortgage don’t require a down payment. For the latter, the caveat is “for those who qualify.”

We’ll dive into the down payment myth first and then tackle another that you may find surprising.

The truth about down payments

Yes, you’ll find mortgages on the market that require 10% and even 20% down. You’ll also find loans that require zero down, such as some USDA products and the VA mortgage.

Then, there is the loan backed by the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration, or FHA. Qualified borrowers may pay as little as 3.5%.

Learn more about FHA-backed loans at, or

Finally, don’t overlook the many government programs designed to help lower income Americans buy a home. has compiled a state-by-state list of assistance programs.

Misconception 2: Current mortgage rates are too high

Currently, mortgage rates have hit a 22-month high, according to Brett Holzhauer at Keep in mind, however, that we’re coming off of record low mortgage rates.

“… the average 30-year mortgage rate hit a low of 2.65% in Jan. 2021,” Holzhauer reminds us. “Since then, the average mortgage rate has climbed to 3.56% as of Jan. 21” of 2022.

Yet younger homebuyers assume they’re too high and many are prepared to wait until they go down again. This may not happen, if the Fed has its way, hinting at three rate hikes this year.

Now, for those with poor credit, yes, your mortgage rate will be higher than you may expect. The mortgage rate you will be offered is “… determined for the most part on two factors: credit score and equity/down payment,” notes Holzhauer.

If either or both of those factors are keeping you from jumping into homeownership right now, do yourself a favor and get to work fixing your credit problems and saving some money.

Pay special attention to your credit card debt. Pay it off until you’ve hit 30% of your credit limits, don’t take on new credit or close any accounts that appear on your credit reports and use credit as little as possible.

If you’ve still decided to put your homebuying dreams on hold, check out these common-sense steps to getting ready to buy in the future, at

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