No doubt about it: there’s a ton of misinformation, disinformation, and just pure myths out there about buying a home – especially when you go to family and friends for advice. The truth of the matter is that only real estate experts are experts when it comes to home buying. And buying a home is way too big a transaction for you to go into it with inexpert advice. So here are the top home buying myths debunked in [market-city].
You Must Have a 20% Down Payment
This is what the old-timers always said, and it definitely is the ideal situation because it will allow you to avoid the cost of private mortgage insurance (PMI). But it’s just no longer true in every case. Of all the home buying myths in [market city], this may be the one that keeps many people from realizing their dream.
As long as you can pay the monthly cost of the PMI, many lenders will offer to finance for 10% or even 5% down. And there are government-backed FHA loans that require only a 3.5% down payment. In addition, you can avail yourself of the many other down-payment-assistance options such as one of the many programs for low-income home buyers.
A 30-Year Fixed-Rate Mortgage Is Best
The idea that you must have a 30-year fixed-rate mortgage is one of the home buying myths in [market-city] that sometimes lands people in a bad financial situation. Sure, your monthly payments will be lower than with a 15-year mortgage, and the interest will never change. But what is the total cost over the life of the loan?
With the 30-year mortgage, you’ll end up paying significantly more in interest. And for the first few years, almost all of your payments will go toward interest, and you won’t be building any equity. If you’re more interested in paying your house off than in paying a bunch of interest, then a 30-year mortgage may not be your best option.
The Down Payment is the Only Upfront Cost
Many times, first-time home buyers are seduced by one the home buying myths in [market-city] into not being prepared for all the upfront costs, which can include a lot more than just the down payment. You may be responsible for part or all of the closing costs, anywhere from 3% to 6% of the sale price, depending on your state. In addition, there will be a multitude of other fees, taxes, and various costs such as those for inspections, credit reports, and insurance.
Schools Matter Only If You Have Kids
The fact is, though, school systems do matter whether you have kids or not. Good schools are an indication of a good neighborhood. And if it’s a good neighborhood, your home is likely to appreciate and increase in value significantly over the long haul.
You Don’t Need a Real Estate Agent
Yes, you can buy a home all on your, but you’ll be taking a big risk. An agent can help you find the home you really want and then help you get the best price. An agent can also help you avoid the various legal and financial pitfalls, as well as guiding you through the lengthy, complicated process. In short, it’s probably in your best interests to resist the urge to do a DIY home purchase.
Even though you’ve now had the top home buying myths debunked in [market-city] and won’t fall prey to them, there’s still a lot more to know. So why gamble with your future? It’s always a good idea to enlist the help of a qualified real estate professional.
