Homeownership is a goal for many across the income spectrum; however, the goal can often feel unattainable. Rising home prices, elevated interest rates and high down payments and closing costs are significant barriers to homeownership, particularly for first-time homebuyers.
We also can’t forget that historical policies and practices made it nearly impossible for minorities to buy homes in certain areas, regardless of income, prohibiting families from building generational wealth—a ripple effect that continues to impact aspiring homeowners today.
While banks and other mortgage servicers offer programs to help low- and moderate-income individuals and households, including down payment assistance, these programs only scratch the surface. Homeownership is more than just a down payment and the purchase price; it’s insurance, HOA fees, maintenance and repairs, property taxes, and more.
But it’s not just the financial aspect; the mortgage process itself can feel complex and overwhelming. First-time homebuyers don’t know what they don’t know. The financial services and mortgage communities have an opportunity to demystify the mortgage and homebuying processes and equip prospective homebuyers with the knowledge to better plan and prepare for homeownership.
Financial knowledge is the foundation for economic empowerment
Because of the stigma surrounding homeownership, many consumers don’t believe homeownership is a possibility for them. The truth is it can be, and it’s our responsibility, as an industry, to help them realize it.
That means going into communities and engaging people in a direct conversation, understanding the challenges they’re experiencing, and helping them navigate them. Some of the common questions we hear include:
- What is a good credit score to buy a home?
- How do I qualify?
- When is a good time to buy?
Knowledge is power. People welcome the opportunity to learn more about the mortgage process. Fortunately, the onus doesn’t fall on any one organization. We all play a role.
For instance, at Experian, we’ve worked with programs such as HomeFree-USA’s Fast Track to Homeownership, which is designed to get renters ready for mortgage approval and homeownership. Its intermediary network oversees 53 affiliated community and faith-based housing counseling agencies across the nation.
Additionally, Experian is part the Mortgage Banker Association’s CONVERGENCE Collaborative, a charitable organization designed to address the racial homeownership gap. The effort brings together various stakeholders across the mortgage industry to provide the knowledge and resources to help underserved communities achieve their homeownership goals.
Financial literacy is the cornerstone of economic empowerment. Collaborating with community-based organizations, as well as non-profits, can help members of the financial services and mortgage industries more effectively reach prospective homebuyers and help them develop a game plan to achieve their financial goals.
Homeownership is a pathway to financial security—but for too many, it feels out of reach. Now is the time for industry-wide collaboration to create lasting impact. Through financial literacy and equitable access to mortgage opportunities, we can build a stronger, more inclusive housing market for future generations.