10/19/2017

Common Myths When Buying A Home

Have common real estate myths stopped you from taking a jump into homeownership? When buying a home, we tend to confide in our friends and family who have already bought homes, but they might not be the experts you think they are. Here are a few examples of the most common, misleading information about purchasing a home.

Your Down Payment Must Be 20%

Although it is helpful to put a 20% down payment on your house, it is NOT necessary. Many lenders in the market today are willing to help, not only first-time homebuyers, but many others as well, obtain a conventional loan with as little as 5% down. Another option is to skip the conventional loan and head to the Federal Housing Administration (FHA) for a government-backed loan with only 3.5% down, if you and the property qualify.

To figure out what is best in your situation we suggest contacting local lenders in your area to see what deals they are willing to give. Most importantly, ALWAYS shop around and compare different lenders, NO it will not penalize your credit, if within the same thirty-day period.

While there are benefits to putting down 20%, including lower monthly payments, no PMI and a lower interest rate, knowing what you can afford takes research and a close look at your finances. This is something that each and every person has to do on their own — crunch the numbers to see what works well for them. So, don’t let the twenty-percent down rule ruin your dreams of purchasing a home, and stop leasing today!

The Only Up Front Cost Is The Down Payment

If you’ve managed to find a home and make an offer, you may think the rest will be smooth sailing. But first, there’s the home inspection, then there can be a pest inspection and if you see things in your home inspection you’d like the seller to address, that’s going to lead to more negotiations.

So, if you limit yourself to just saving a couple percent of that loan amount, you’re going to be strapped for cash when it comes time for closing costs or when it comes time to furnish the home that you’re purchasing.

As with any purchase, cost is always a factor but differences in fees may matter more. Mortgage lenders aren’t just a commodity. In a competitive selling market like many housing markets are seeing right now, the reliability of your lender could mean the difference between getting your dream home and losing to another offer so you’ll want a lender with a good reputation. You’ll also want someone who can work well with your real estate agent so ask your agent for referrals.