Buying a home is a major milestone in anyone’s life– but, as anyone who’s done it can attest, there are plenty of myths and misconceptions that can make the process more difficult than it needs to be.
Anticipating these myths ahead of time can arm you with the knowledge you need to make the best possible decision, navigating the complex real estate market with the confidence you need to make the best purchase available to you.
1. Myth: You need a perfect credit score to buy a home.
Fact: Your credit score is important, but it doesn’t have to be perfect. There are plenty of mortgage lenders that accept scores under 800 (850 is considered the perfect score!).
It’s recommended to have a score over 620. Even if you don’t, there are some mortgage lenders who will still work with you. Although having a lower credit score can mean higher interest rates on your mortgage, it doesn’t exclude you from being able to purchase a home.
2. Myth: You have to make a 20% down payment.
Fact: It’s actually a common misconception that 20% of the home’s purchase price is required as a down payment. Depending on which mortgage loan program you work with, there are options with lower down payments– some as low as 3%.
These programs are designed to make home ownership more accessible, which is great news for you as a buyer!
3. Myth: Renting is cheaper than buying.
Fact: While renting is often the only option for people who can’t purchase a home or aren’t ready to, it’s definitely not necessarily cheaper than buying.
The cost of rent depends on many factors, like location and market conditions, but in the long run it’s often more cost-effective to buy a home. Taking advantage of programs that require a low down payment can help you to achieve this.
When you buy a home, your monthly payments will go toward building equity for yourself. Paying rent secures your housing for another month, but it only goes toward your landlord’s pockets.
4. Myth: You have to get a 30-year fixed mortgage.
Fact: Home buyers have various mortgage options available to them. These might include adjustable-rate mortgages (also referred to as ARMs) and shorter-term loans, like a 15-year fixed-rate mortgage. The choice depends on your financial situation, and your long-term goals.
5. Myth: You can’t buy a home if you have student loan debt.
Fact: Having student loan debt doesn’t automatically disqualify you from buying a home. Lenders consider your debt-to-income ratio, and other factors, when determining your eligibility for a mortgage loan.
It’s definitely possible to qualify for a mortgage, even with student loans.
6. Myth: You should wait for the perfect market.
Fact: Timing the market is nearly impossible. There’s really no such thing as the “ideal” time to buy a home– so if your goal is to wait until the conditions are just right, you might be waiting a long time.
Focus on your personal financial readiness, and your long-term goals. Historically, real estate has been a valuable investment over time.
7. Myth: All real estate agents are the same.
Fact: Real estate agents and realtors vary in experience, expertise, and personality. It’s important to find an agent who understands your needs and can guide you through the home buying process efficiently. If you do some research, you’ll be able to find someone who’s just right for your needs!
8. Myth: You don’t need a home inspection.
Fact: A home inspection is a very important step in the home buying process. It helps to identify potential issues, and prevents unexpected expenses after purchase. Skipping an inspection can be a costly mistake!
Arm yourself with knowledge
Understanding common home buying myths ahead of time can help you to approach the process with clarity and confidence. While everyone’s home buying journey is unique, having accurate information about what to expect, and what’s required of you, is crucial.
By dispelling these misconceptions, you’re better prepared to make informed decisions, find the right property, and embark on the path to homeownership. Got questions, or ready to get started? Drop Edge Realty a line today.