Don’t Let These Common Myths Keep You From Buying a Home

There are many misconceptions about the home buying process that keep first-time buyers from entering the market. Fortunately, they are often just that – misconceptions. Let’s explore some of the more common myths surrounding the home buying process that keep many first time buyers on the sidelines.

You need perfect credit to qualify for a mortgage…

This might have been true many years ago, but the introduction of government-backed loans and more forgiving underwriting practices have opened homeownership up to more prospective borrowers. Consider FHA loans, which are mortgage loans backed by the federal government. FHA loans are available to borrowers with credit scores as low as 500. Some conventional loan programs have also opened up their products to borrowers with less-than-great credit. Some conventional loans can be approved for borrowers with a credit score in the 620-650 range.

You have to have at least a 20% down payment to buy a home…

The “20% down” myth seems to be one of the most persistent ones still floating around. Again, this was true several years ago, but it’s no longer the case. Let’s look at the FHA loan program again… with this program, you are only required to have a 10% down payment if your credit score falls between 500-579. If your credit score is 580 or higher, you only need 3.5% for a down payment. On a $250,000 home, that’s only $8,750. There are even some conventional loan products out there that are offering 3% down payments to qualified borrowers.

Buying a home is more expensive than renting…

This one can be a little confusing, and it can also depend on where you live. There are a few parts of the country where it is still cheaper to rent than to buy – but for the majority of the country, it’s the other way around. This is also true if you plan to stay in your home for a while, building equity. With rents on the rise, rivaling mortgage payments on an average home in most cities, just the fact that you’re building equity can be an appealing reason to buy. Why pay your landlord’s mortgage when you can pay your own and get that money back (and then some) when you sell? The upfront closing costs are higher when buying a home than when renting one, but you will make that money back in the end. Some renters are also accustomed to the luxury of not having to replace appliances or HVAC components if something goes wrong. While it’s true that these things become your responsibility when you own your home, there are home warranty programs that will cover your appliances and mechanicals for less than $500 per year.

You’ll never find the “right” home…

Whether you have a smaller budget, unique requirements, or want to be in a specific neighborhood, you might be worried that the perfect home for you isn’t out there. This is where a good buyer’s agent comes in – they’re like house-hunting superheroes! Agents have access to listings that you won’t find on sites like Zillow or Realtor.com. They also know about new listings before they hit the market, so they can make sure you’re the first in line when a new property matching your criteria goes live. Most agents have extensive networks of contacts and can find what you’re looking for. It’s not unheard of for an agent to play “matchmaker”, finding a home for a buyer that would never be listed if the seller wasn’t made aware of a ready and qualified buyer who was looking for exactly what they have. Bottom line, find a good buyer’s agent and trust them to get you into the home you want – it’s their job!

Whatever your reasons for being hesitant to jump into the world of homeownership, know that where there is a will, there is a way. Work with an agent to overcome any doubts you have, and let them show you how easy and rewarding becoming a homeowner can be!

2019-08-21