Purchasing a home is costly. These terrifying house-purchasing myths may have some basis in reality. Or perhaps they’re just voices in your head trying to talk you out of what’s possible. In any case, there are myths about purchasing a home that some people relate to but perhaps shouldn’t.
I’m sure you’ll have a lot to consider and plan for before the big day if you’re moving houses. The countless home relocation myths, which pose a threat to derail all of your preparations, only serve to increase the stress of the process.
Unsurprisingly, many people have unfavorable notions about the process of moving—however, these are usually always outdated or wholly untrue.
It can be quite difficult for home buyers to know how to best plan their move because of these moving-related myths, and it might even wind up costing them more money overall.
Get rid of these eight housing purchase fallacies to start realizing how affordable owning is!
1. A 20% down payment is required.
No, a 20% down payment is not required. There are now lending options created specifically with first-time house purchasers in mind. Even if you are prepared to put down a sizable deposit, it may still be in your best interest to consider all of your options.
- Fill out an application for down payment aid. Consult with regional and municipal authorities. They might provide loans or grants. And to qualify, you don’t have to be a first-time home buyer!
- Make use of gifts. It is exactly what it sounds like: cash that you are given. Make sure to accurately report gift money in financial records. Copies of your most recent bank statements, your donor’s most recent bank statements, and cashier’s checks are required.
- Decide to use mortgage insurance. Your purchasing power may improve thanks to mortgage insurance, which also enables you to preserve your funds. Additionally, if you select a loan package that includes private mortgage insurance, it may be canceled after your loan-to-value reaches a certain level (LTV).
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2. Renting costs less than buying.
This may be true in the short term, but if you intend to rent for a few years or more, it might be preferable for you to consider buying a house. That’s because mortgage payments (when you select a fixed rate) are predictable, whereas rent can increase yearly.
Do your study before you rule out becoming a homeowner. The answers you get from a rent vs. buy calculator could surprise you.
3. Interest rates are rising.
The phrase “interest rates on the increase” appears frequently in the news. But the question you must ask is, from what is it rising? Any housing expert would tell you that mortgage rates have been unusually low since the housing meltdown.
4. Student loan repayment must come first.
It’s true that millennials have more college debt than any previous generation. New regulations, however, make it simpler to be approved for a mortgage with student loans.
5. You must have a flawless credit rating.
To purchase a home, your credit score is not necessary to be flawless. Though bear in mind that if your credit score needs improvement to purchase a property, it probably requires improvement to rent a home.
Both renters and homeowners face issues as a result of low credit. Make an effort to improve your credit. When you believe things are improving, seek advice from a lender that doesn’t give its employees royalties.
In this manner, you are guided toward the appropriate lending program. Additionally, since you own the home you live in, you avoid the yearly rivalry you might have if you were renting.
6. Every lender is the same.
Depending on the lender, rates and fees change. While some impose upfront costs, others do not. Some employers do pay commissions to their staff, which means you will pay more.
Make research. You might even discover that some lenders have access to local lending programs or down payment help that can save you thousands of dollars.
The ideal lender will spend time getting to know you. Your financial demands and objectives will be taken into account. Before making a decision, we advise doing some homework about your alternatives and taking the time to ask your lender specific questions.
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7. The listed price is only an estimate.
Avoid putting your heart and soul into a home that is under or beyond budget in markets that are incredibly competitive. You might need to offer more than the listing price in order to be successful.
If your budget is $450,000 and you’re shopping in Seattle or Denver, you might need to start looking at $400,000 properties and work your way up.
Real estate agents are knowledgeable about their communities. An effective real estate agent can help you stay on budget and can advise you on how to make the best offer.
8. The winter and fall are not good times to buy
Many people believe that spring is the best season for home purchases, but in reality, prices can rise when there are too many buyers vying for the same inventory of homes.
By purchasing in the off-season, you can get a better deal. MarketWatch claims that the peak of the starter house inventory occurs in October. Less competition and more time to see and think about a home before making an offer result from increased inventory.
For millions of people, owning a home has always been a goal that has its own special set of benefits and difficulties. Nevertheless, there are just as many urban legends about what it’s like to own and manage the property as there are real advantages to owning.
We have compiled 8 homeownership fallacies that need to be dispelled, whether you’re a first-time buyer or a seasoned homeowner seeking a reality check.