Home-Buying Myths You Need to Stop Believing Immediately

You’ve certainly told others of your interest in buying a home. Family members. Friends. Co-workers. But those that are close to you might not be the Real Estate experts you think they are. You could be listening to bad, although well-intentioned, advice without knowing it.

THE FIRST STEP IS LOOKING FOR A HOUSE

Browsing is always fun, but when it comes to serious home-buying work, you need to get pre-approved for a mortgage before you embark on your home-buying journey.

A 30-YEAR MORTGAGE IS THE BEST OPTION

The majority of people opt for 30-year fixed-rate mortgages because they are lower than its 15-year counterpart. However, it is important to realize that you could end up paying more during the life of the loan if you pick the 30-year option instead of the 15-year mortgage. That’s because you’re essentially borrowing the same amount of money for twice as long and at a higher interest rate.

This is not a “one size fits all” situation. It is important to keep an open mind toward other loan plans, including an adjustable-rate mortgage.

YOUR DOWN PAYMENT MUST BE 20%

Sure, a 20% down payment is necessary if you want to assure that you won’t have to deal with private mortgage insurance (PMI). But many lenders offer up home loans with as little as 5% down. Or you can pass on the conventional loan and go to the Federal Housing Administration (FHA) for a government-backed.

THE ONLY UP-FRONT COST IS A DOWN PAYMENT

Don’t forget the slew of fees, taxes, and other costs for inspections, credit reports, insurance, among others. You will want to contact your Realtor to better inform you on how this breaks down.

YOU CAN’T BUY WITH BAD CREDIT

If you were planning on going the route of a conventional loan, having bad credit might give you a full stop. But borrowers with low credit scores can qualify for FHA loans.

YOU DON’T NEED A HOME INSPECTION

Choosing to waive your home inspection means you’ll get the home entirely “as is” – including any and all problems that come with it. You need a home inspection.

THE ASKING PRICE IS SET IN STONE

There are a number of factors that play a role in determining this. How many days has the house been on the market? Is the market hot right now? Make sure you consult your Realtor in determining this one.

SCHOOLS DON’T MATTER IF YOU DON’T HAVE KIDS

The area and neighborhood that surrounds you matters. Even if you don’t have children, a potential buyer when it comes time for you to sell in the future may have them. Plus good schools are a sure sign of a good neighborhood.