First-Time Homebuyers Deterred from Purchasing By Down Payment Misperceptions, According to Genworth Industry Survey

RICHMOND, Va., May 18, 2017

The survey was conducted at the 2017 Mortgage Bankers Association Secondary Market Conference recently held in New York City.

The greatest cause of confusion among first-time homebuyers is the role of a 20 percent down payment.  28 percent of respondents said consumers still mistakenly believe that a 20 percent down payment is a requirement for purchasing a home, keeping many first-time buyers from achieving their homeownership goals.  Interestingly, an additional 41 percent of industry executives surveyed believe that even among prospective borrowers who understand a 20 percent down payment is not mandatory to purchase a home, the belief persists that it would be difficult to get into a house with less. 

"While first-time homebuyers continue to drive the purchase market, we believe many are staying on the sidelines due to the misconception that a 20 percent down payment is required to secure a mortgage," said Rohit Gupta, CEO of Genworth Mortgage Insurance. "There are various low down payment options available today that allow prospective homebuyers to reach their dreams of homeownership sooner. It is crucial that, as an industry, we proactively educate eligible borrowers about solutions that will enable them to buy a home when they're ready."

As a key player in the private mortgage insurance space, Genworth Mortgage Insurance continues to explore solutions that can help facilitate a seamless process for lenders as well as consumers.  Private mortgage insurance is an effective solution for credit worthy buyers entering the purchase market with less than 20 percent to put down, without them having to wait for what can take many people several years to save that amount.

Following are additional findings from this survey, which provide insights into the industry's appetite for technology integration, front-end credit risk transfer and underwriting standards:

Industry Appetite for Increased Technology Growing but Faces Integration Headwinds
While the industry is overwhelmingly aware of the need for improved technological infrastructure for originating mortgages (93 percent), respondents are divided on what is holding the industry back. Outdated mortgage technology platforms requiring extensive overhauls (35 percent), the lack of a true understanding of the requirements for integration (29 percent), and the rising associated costs (29 percent) were seen as the biggest obstacles to bringing better technology into the home lending process.