A recent study from Urban Institute, which analyzed data from the 31 largest metropolitan statistical areas, found that 19 million millennials across the US are “mortgage ready,” which is defined as being no older than 40, not already having a mortgage, and having ample credit to qualify for a traditional loan (which includes a credit score of 620 or above and no recent credit issues, like bankruptcy or major delinquencies).
Why haven’t these millennials made a move? The report cites misconceptions about down payments as a major contributing factor for mortgage-ready millennials not making the jump into homeownership. (According to a surveyreleased by Laurel Road earlier this year, 46% of Americans were unfamiliar with alternative lending options, and many millennials aren’t aware they can leverage these alternative lending options to purchase a home with as little as 3% down.
The TakeawayIf you’re a mortgage-ready millennial but haven’t made a move because you’ve been struggling to save a large down payment, it’s time to start exploring alternative lending options. In today’s market, you don’t need 20% for a down payment—you might already have everything you need to purchase a home.