MILWAUKEE, April 6, 2017 /PRNewswire/ -- April is National Financial Literacy Month, making it the ideal time to debunk one of the most persistent myths in mortgage finance; the 20 percent down payment. While it is common advice, it is simply untrue and may even cost potential home buyers thousands of dollars in the long run.
"I'm amazed by the prevalence of the 20 percent down payment myth when research consistently proves it is untrue," said Margaret Crowley, Mortgage Guaranty Insurance Corporation's (MGIC) Vice President of Marketing and Customer Experience. "For example, The National Association of Realtors® (NAR) 2016 Profile of Home Buyers and Sellers found that the median down payment for first time homebuyers was 6 percent for the third straight year. Even repeat buyers put less than 20 percent down. In fact, in three of the past four years the NAR study found the median down payment for repeat home buyers was 14 percent."
As an advocate for expanding access to sustainable homeownership, MGIC has created a new Buy Now vs. Wait calculator. The tool is specifically designed to help lenders quickly and easily show consumers why it might make financial sense for them to purchase a home now. By helping consumers separate facts from myths, lenders can gain leads and earn loyalty.
The Buy Now vs. Wait calculation begins with some basic information: current rent, monthly savings and credit quality. Next, the calculator requests a desired home price, down payment savings and an estimated interest rate. The calculator then shows the costs associated with buying now verses waiting so consumers can make an informed decision.
"MGIC has 60 years of experience helping families successfully become homeowners with as little as 3 percent down," continued Mrs. Crowley. "We educate potential homebuyers about their options so they can make an informed choice that is right for them. It may be buying with less down or it may be waiting until they have more saved, but we want them to know the true costs and benefits so they are making that decision based on facts."
Lenders are welcome to share the Buy Now vs. Wait calculator on their website, blog, social media accounts and other marketing materials. It can be found at mgic.com/buynow along with other valuable first time home buyer resources.
This year MGIC is celebrating our 60th anniversary. As the inventor of modern private mortgage insurance, we are committed to providing industry leading products and services that make originating affordable low-down-payment mortgages safer for the financial institutions we serve. Fulfilling this vital role helps families achieve homeownership sooner. At February 28, 2017 MGIC had $182.9 billion of primary insurance in force covering approximately one million mortgages.
From time to time MGIC Investment Corporation (NYSE: MTG) releases important information via postings on its corporate website, including corrections of previous disclosures, without making any other disclosure and intends to continue to do so in the future. Investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information can be found at http://mtg.mgic.com under Investor Information.
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SOURCE MGIC Investment Corporation