Buying a home can be an exciting yet intimidating process. Unfortunately, many myths exist about the home-buying process, which can make it feel even more challenging than it needs to be. Let’s take a closer look at some of the most common home-buying myths and debunk them to help you navigate the process more confidently.
Myth #1: You must have perfect credit to qualify for a mortgage.
While having good credit is important but certainly not required to qualify for a mortgage. While you may get better overall terms with a better credit score, programs are available for scores as low as 580 (and even those without credit).
Myth #2: You must make at least a 20% down payment on a home.
One of the most common home-buying myths is that you need a 20% down payment to purchase a home. While it is true that a 20% down payment can help you avoid private mortgage insurance (PMI), it is not necessary. Many loan programs allow you to put down as little as 3% to 5% of the purchase price; some even offer 0% down payment options.
Myth #3: Buying a home is always better than renting one.
Buying a home is not always the best option for everyone. While owning a home can provide stability and financial benefits, such as building equity and potential tax advantages, it also comes with significant responsibility and expenses. Renting can be a better option for those who value flexibility, have limited funds for a down payment or closing costs, or are unsure about their long-term housing plans.
Myth #4: You should buy the most expensive home you can afford.
While buying a larger or more expensive home may be tempting, it’s crucial to consider the overall cost of homeownership, such as property taxes, homeowners insurance, and maintenance costs. Buying a more affordable home can help you avoid becoming house poor and give you more flexibility in your budget.
Myth #5: You don’t need a home inspection as it may delay getting your home.
A home inspection is a crucial part of the home-buying process as it can uncover potential issues with the home that could be costly to repair or even make the home unsafe to live in. Be sure to hire a qualified home inspector to inspect the home before making an offer. In most instances, your realtor will help you find a trusted home inspector.
Myth #6: You don’t need to get pre-qualified, as it doesn’t matter in this market.
Actually, the opposite is true! Not only will you know what you can afford, but it also shows a seller you are serious and may allow you to get a home over someone else.
By understanding these myths and debunking them, you can confidently approach the home-buying process and make more informed decisions. If you plan to buy a home this summer, talk to one of our mortgage lending experts to get started. Whether you are a first-time homebuyer or an experienced owner, we have a mortgage loan to fit your unique needs.