Purchasing a home is one of the most important decisions you will ever make! The topic itself tends to drum up a lot of conflicting information from a wide array of sources. Let’s go over the real facts surrounding buying a home and knock out those home-buying myths!
Credit Scores
Surprisingly, you don’t need perfectly pristine credit to purchase a home. Traditional bank lenders will work with credit scores as low as 640, but your agent can also get you connected with local lenders that accept scores as low as 580. Although there are other stipulations to quality for a loan, you don’t need a perfect score in the 700’s and 800’s to do so.
Down Payments
There is a huge misconception surrounding down payments. Common thought is that you must put a minimum of 20% down on your home to buy. This is simply not true and that information in outdated. These days, there are a large variety of loan programs that only need an average of 3-5% down. Based on your income or military status, you might even quality for mortgage programs that require 0% down. Although you’ll expect to pay more in closing costs, this is still significantly less than the 20% that most believe they have to put down.
No Agent
Realtors are so important to the home buying process. Many believe they don’t need an agent or will save money without an agent. This couldn’t be further from the truth! The home buyer does not pay the agent’s commission fee and the knowledge they’ll bring to the table is invaluable. If you go into a home buying process expecting to get a discount on a home by not using an agent, you may wind up with paying more for the home than you would with an experienced agent on your side to negotiate.
Cheaper to Rent
Many people think it is cheaper to rent than it is to buy. This is a very common misconception! Rental prices have skyrocketed over the last several years, making renting as expensive (if not more) than paying a mortgage. Yes, there are more up-front costs with home-buying, but these pay off in the long run. If you plan on staying in the property for at least 5 years, buying is considerably cheaper than renting.
Buying a Fixer-Upper
Everyone has seen those catchy shows on television where homes are purchased cheap and turned into a dream home in a one-hour episode. While this is great, in principal, it rarely happens this way. Doing home renovations such as these can wind up costing much more than you original believe they will. You may end up paying more in the long run. You may also wind up waiting longer than anticipated for your home to be completed, which could result in additional housing costs.
No Home Inspection
All homes need a home inspection, even newer homes! Builders make mistakes, cut corners and rush. It is just the nature of the business. That said, an experienced home inspector will help you uncover any items that may cause problems in the future. You will be able to get those items repaired under warranty or by the seller before you close. The average home inspection is $300-$400 dollars and 100% worth the investment.
Buying a Fixer-Upper
Everyone has seen those catchy shows on television where homes are purchased cheap and turned into a dream home in a one-hour episode. While this is great, in principal, it rarely happens this way. Doing home renovations such as these can wind up costing much more than you original believe they will. You may end up paying more in the long run. You may also wind up waiting longer than anticipated for your home to be completed, which could result in additional housing costs.
Overall, buying a home is an amazing investment. When done right, with a knowledgeable agent on your side, the home-buying process can be smooth and enjoyable.