Mortgages: What Americans prefer
More than half of Americans prefer a 10 percent down payment.
Across generations, 53 percent reported they would chose a 10 percent down payment. Just over 21 percent prefer a 20 percent down payment, while 14.24 percent said a 15 percent down payment is ideal, and 11.32 percent said 30 percent down payment, according to American Financing’s Mortgages in America Survey. However, according to a recent NerdWallet report, 29 percent of Americans believe 20 percent is required for a down payment.
However, potential homebuyers are not paying attention like they should be. More than half of Americans who plan to buy a home within the next five years reported they do not follow mortgage interest rates, while 25 percent reported they do not understand how interest rates work. More than a quarter of millennials fell into this category.
Married non-homeowners would like to buy within one to two years, while single non-homeowners plan to wait a bit, about five years, to purchase. Millennials and Generation X both prefer 30-year mortgages, while baby boomers seek 15-year mortgages.
In PAR’s recent Welcome Home survey, 38 percent of respondents chose a 30-year mortgage, while 7 percent picked a 15-year mortgage. Meanwhile, 22 percent paid cash.
Not surprisingly, 77 percent of baby boomers already own a home, as do 49 percent of Generation X and 24 percent of millennials. More than half (54 percent) of millennials rent, as do 39 percent of Generation X and 20 percent of baby boomers. Forty percent of renters said an increase of $100 or less per month rent would push them to move, and 37 percent said their monthly rent increasing $101-300 would probably lead them to move.
The NerdWallet report also found that 79 percent of Americans who plan to buy in the next five years would sacrifice to make a down payment.