The real estate market can be challenging to navigate when you are new to it. Even when you seek advice from others, you might get misinformed. Here are the biggest home-buying myths you shouldn’t believe.
A home inspection is not necessary
When an excellent property appears on the market, a full-on bidding war starts between the buyers. It’s not like people buy a home every day, so the frenzy they create when they see the perfect home for them is understandable. They try everything to become a top candidate for getting the said home. That usually includes submitting a higher offer or getting pre-approved for a mortgage. Sometimes people even waive their right to do a home inspection. You might get some potentially dangerous advice that a home inspection is unnecessary. Although some houses do not conceal any flaws, some may hide issues that can be costly for you to fix. So, even though the risk may pay off and get you the home of your dreams, it may also get you in financial trouble.
The down payment is always 20% of the purchase price
This statement would be correct if we changed only one word, and that is always. The down payment is usually 20% of the purchase price but not always. There are many loans and programs, especially for first-time buyers you should get familiar with. If you belong to a particular group, such as war veterans, you might even be eligible for a loan that requires a 0% down payment. You must be well informed about these things because we are discussing substantial sums of money you can save. Also, bear in mind that, as is the case with many other subject matters, loan options differ from state to state.
Down payment and closing costs are all you need to save up for
So, your neighbor Amy has told you she only paid the down payment and closing costs, and that’s it; her new life can begin. Well, that may or may not be accurate, even in theory. There are other costs you must save up for in order not to end up in an unfavorable situation. There may be specific mandatory insurance fees, and your home may be part of the HOA which insists on those. Also, you should think about the moving costs as well. For example, moving from Miami to California is not the most straightforward and cheapest endeavor. You’ll have to consider whether you leave it in the hands of pros or DIY your move. Again, you’ll need to gather detailed information regarding this topic specific to the home you are buying and the neighborhood.
A 30-year mortgage with a fixed rate is the best you can get
Some home-buying myths have come about due to not seeing the bigger picture. A 30-year mortgage with a fixed rate may seem like the best option. Especially when you only observe the amount you need to pay monthly. But how about the overall amount? It is never what you have asked for but a lot more. Loans with a shorter repaying period may require you to pay more each month, but you will pay significantly less. Therefore, don’t blindly fall for this myth but evaluate all your loan options properly.
One of the biggest home-buying myths: It’s better to rent than buy a home
Again, this myth has come out of people’s habit of making conclusions without considering all factors. Rent may be lower than the monthly mortgage payments. Your landlord may be an honest person you have perfect communication with. And to collect all the money you’d need for a down payment and other costs, you might need to lower some of your living standards. With that thinking, many people decide buying a home is foolish and unnecessary. There are multiple reasons why this myth is a total myth. Firstly, the rent you think is more affordable than a mortgage payment may change yearly.
On the other hand, mortgage rates are stable and fixed. Also, after a certain amount of time, let’s say three years, depending on the state and lender, your home will have a considerable amount of equity at your disposal if you decide to sell. Paid rents, on the other hand, are the money that will never come back to you in any shape or form.
Only people with perfect credit scores get approved for a loan
That is just not accurate. Besides, don’t ever assume anything regarding loans and mortgages without making real inquiries. The lenders don’t only look at your credit score, but they pay attention to its trend. They will take it as a good sign if you gradually improve it. In any case, don’t give up without trying first.
Colder months of the year are not a good time to buy a home
Spring is the most popular month in the world of real estate. That is a fact. But most people are wrong in thinking that fall and winter are unfavorable for those activities. That makes the colder period of the year less crowded in this market, so you, as a buyer, will have a better chance of getting the property you like. The real estate agent will be able to pay you a lot more attention since they will have fewer clients. Also, in this period, many sellers want to close the deal fast, so you can finalize the sale quicker and potentially at a better price.
As you can see, these home-buying myths can significantly ruin your chances of scoring the property of your dreams. You should never take any information from non-experts without double-checking it first. There are so many professionals out there that will provide you with much more accurate data and help you acquire the home you want.