DEBUNKING MYTHS TO HOME BUYING
Finally ready to make the transition into home ownership? Awesome! In this exciting time you’ll surely be turning to friends and family for an insight into the process. Unfortunately, there seems to be a circulation of misinformation spreading around and we’re here to put a stop to that and hopefully clear up a few of these myths.
1. THE FIRST STEP IS SEARCHING FOR A HOME
You know the saying; “Don’t put the cart before the horse”? That saying is important to remember when it comes to buying a home. You don’t want to start looking for a house until you’ve had a chance to sit down with a lender and discuss what loan amount the bank will qualify you for. If you fall in love with a house that’s $250,000 and come to find you’re only qualified for $200,000, you’d quickly have your hopes crushed and furthermore you’d never get all that time you wasted back! Don’t start the process on the wrong foot and make sure the numbers line up, talk to a mortgage rep or let me help you find one!
2. YOU DON’T NEED A REAL ESTATE AGENT
For starters, when buying a home, 99% of the time the buyer’s agent gets paid by the sellers. That random 1% can be for odd circumstances and you probably won’t encounter them in your search. So basically you’re getting to use the services of a real estate agent for free! Having a real estate agent on your side means you’ll get to see homes that aren’t as readily available on public searches, you avoid outdated listings and scammers (there are lots of them) and you have protection when it comes to navigating the legalities of contracts and buying a home. Why wouldn’t you want an awesome negotiator working to ensure you get the best from the transaction? For FREE!
3. YOU CAN’T BUY A HOME WITH BAD CREDIT
Fortunately for some this is a myth. Lenders and banks come by the hundreds of thousands and although there are only a handful of loan options, a lot of lenders can work with credit scores down to the low to mid 500’s. Get in touch with an agent to help you connect with the right lender. That lender can help you reach your goals and potentially get approved for the best loan available to you. There are a lot of factors that go into approvals, your credit score is a big one, but that three-digit number doesn’t have to stick out like a sore thumb during the process. If your score is not so pretty, do yourself a favor and connect with a credit repair specialist to at least get those numbers in the 600’s. A better score will lower you interest rate.
4. YOUR DOWN PAYMENT HAS TO BE 20%
Think you have to sell off some organs? Maybe an arm and a leg to buy a home? No, not at all! An FHA loan only requires 3.5% while a conventional only requires 5%. There are many programs that can potentially help you with down payment assistance or there’s always the potential to be eligible for a 0% down mortgage. USDA and VA loans are the most popular 0% down programs. If you qualify, this can take a big chunk off the amount of cash you have to bring to the closing table.
5. DOWN PAYMENTS ARE THE ONLY UPFRONT COST
This is one of the biggest misconceptions. There are a lot of costs that go into buying a home. Many of these costs you’ll have to shell out upfront. Check with your real estate agent (or me :)) to find out a little more detail on why these costs exist and what they mean for you; the buyer. Moving on from your down payment, you then have to pay for closing costs in order to gain ownership of your new home. Closing costs can range anywhere between 3-6% of the purchase price of the property.
Now that you have some knowledge and can hopefully get your process started; get in touch with an licensed Realtor who will help you get through the process as smoothly as possible.
