Almost two-thirds of consumers think they must be debt-free to get home financing when in fact they can have
The finding, which is based on the results of a recent survey conducted on Wells' behalf, suggests there could be pent-up demand for loans that mortgage lenders could tap by better educating borrowers.
"Financial education represents a tremendous opportunity when it comes to helping more Americans achieve homeownership, and there are a lot of resources available to address the misperceptions that persist about home buying," Michael DeVito, head of Wells Fargo Home Lending, said in a press release.
The survey also suggest that lenders might benefit from educating consumers on how different types of income are considered in underwriting as well as how debt affects the ability to qualify for a loan.
Almost half of consumers who are saving to purchase or repair a home took side gigs as a means to that end, Wells found in the survey of more than 1,000 people. Almost 20%, for example, have driven for a rideshare company to do this.
And the millennial generation, which now represents a key homebuyer demographic, is particularly willing to take jobs on the side to save up money for mortgage payments. Among millennials surveyed by The Harris Poll for Wells, 70% showed a willingness to do this.
So lenders may want to make sure consumers understand that typically side gigs have gotten less consideration in income calculations than loan applicants' main jobs, unless the income has been shown to be reliable over time and likely to support a long-term mortgage.
