Are you planning to buy a house? Homebuying could be complicated especially for a first-time buyer. Let’s set the record straight and separate what fact from fiction! Here are some of the most common myths about home buying and why you should avoid them.
1. You Can’t Buy a House Unless you Have a Great Credit
This could be the easiest myth you could fall for. Having lesser credit does not mean you are not qualified. Even buyers with good credit scores are hesitant to apply for a mortgage because they think they are not qualified.
Less-than-perfect credit doesn’t mean homeownership is impossible. There are benefits of having a great credit score like having the best interest rate when approved. However, several factors are considered when applying for a housing loan such as your work history, debt, income, and mortgage insurance. Additionally, there are still many options of loan programs that can help you overcome this hurdle. There are government-backed programs such as FHA and USDA loans. Whichever choice you come up with, having a bad credit doesn’t mean having your dream home is dashed forever.
2. You Need 20% Down Payment
This myth probably originated from the fact that without such downpayment, many were subjected to pay mortgage insurance which can be too costly. 20 % for home purchase seems to be a lot of money when in fact, there are plenty of lesser and no down payment programs that are available for both first-time and repeat buyers. With the help of mortgage insurance, monthly payments would be affordable. Just keep in mind that you choose the right program that suits your needs.
3. Renting is Cheaper than Buying a Home
When you are deciding to make the transition from renting to buying, you might think that renting is a less expensive option. The thing is, in some areas of the city, the cost of renting a house may be less than a monthly mortgage payment but if you are serious about having your own space, you may end up saving money rather than continue renting in the long run. Instead of paying your landlord, you will be creating equity for your new home.
4. The School System Doesn’t Matter if You Don’t Have Kids
You may think you don’t need to consider what school district you will be living in and you’re not planning on having school-aged children closer to the neighborhood. However, you need to keep in mind that a great school district can have an impact on your property value. In case you have a plan on selling your home in the future, your location would be desirable for potential buyers that have children.
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