<\/p>\nW <\/span>ith so much information to sift through, it can be tough to distinguish fact from fiction. That\u2019s why we\u2019re revealing the truth behind some of the most common home buyer myths and misconceptions.<\/p>\n Buying a home is a big decision, but it doesn\u2019t have to be a scary one. If you arm yourself with knowledge and a qualified team of support professionals, you\u2019ll be well equipped to make the right choices for your family and financial future.<\/p>\n <\/p>\n <\/p>\n Plenty of buyers are purchasing homes with down payments that are much less than 20% of the total cost of the property. Today, you can buy a home with as little as 3-5% down.<\/p>\n There are multiple programs out there that allow you to have a lower down payment, and a lender or mortgage broker can talk you through which option is the best for you. Since you\u2019re putting less money down, you\u2019re a riskier borrower to your lender than people who put down a full 20%. Because of this, you will most likely need to pay mortgage insurance as part of your monthly payment.<\/p>\n Your agent is with you every step of the way throughout your home buying journey, and he or she spends countless hours working on your behalf. It sounds like having an agent is expensive, right? Well, not for you. Buyers usually don\u2019t pay a real estate agent\u2019s commission. Your agent\u2019s fee is paid for at closing by the seller of the home you\u2019re buying.1<\/sup> The seller knows to factor this cost into the property\u2019s total purchase price.<\/p>\n The earlier you bring in an agent to help with the purchasing process, the better. Even if you\u2019re in the very early stages of casually browsing Zillow, a real estate professional can be a huge help.<\/p>\n They can create a search for you in the Multiple Listing Service (MLS), so you get notifications for every house that meets your criteria as soon as it hits the market. The MLS is typically more up-to-date than popular home search sites like Zillow and Trulia. Setting up a search a few months before you\u2019re considering buying gives you a good idea of what\u2019s out there in your town that\u2019s in your budget. Reviewing the MLS and speaking with an agent as soon as possible can help you set realistic expectations for when you actually start the house hunting process.<\/p>\n The earlier you bring in an agent to help with the purchasing process, the better<\/strong>. Even if you\u2019re in the very early stages of casually browsing Zillow, a real estate professional can be a huge help.<\/strong><\/p><\/blockquote>\n <\/p>\n We\u2019ve all watched the shows on HGTV that encourage people to go after fixer-uppers because they\u2019re more affordable and allow buyers to eventually renovate the home to include everything on their wishlist. But, this isn\u2019t always the case.<\/p>\n Sometimes, homes that need a lot of work also require a lot of money. Big renovations, like add-ons, a total kitchen remodel, or installing a pool, take a lot longer than it looks on TV. If you\u2019re really interested in a fixer-upper, ask your agent to show you a mix of newer homes and older homes. If you fall in love with an older home that needs a lot of work, get some quotes from contractors before you buy so you know the real cost of the renovations and see if you can work them into your budget.<\/p>\n Big renovations, like add-ons, a total kitchen remodel, or installing a pool, take a lot longer than it looks on TV<\/strong>. If you\u2019re really interested in a fixer-upper, ask your agent to show you a mix of newer homes and older homes.<\/p><\/blockquote>\n Your down payment is big, but it isn\u2019t the only money you\u2019ll spend during the home buying process. At closing, you\u2019ll pay your down payment, but you\u2019ll also bring closing costs to the table. Closing costs are typically anywhere from 2-4% of the total purchase price of the home.2<\/sup> This amount includes the cost for items like homeowners insurance, title fees, and more.<\/p>\n You\u2019ll also need to pay for an inspection before closing, which usually costs a few hundred dollars. This price will be higher or lower based on the size of your new property. Your lender will also require an appraisal. An appraiser will come in and inspect the home to determine how much it\u2019s worth. Depending on your lender, you may have to pay this when the appraisal is conducted or it might be rolled into your closing costs.<\/p>\n You don\u2019t need perfect credit to buy the perfect home. There are loans out there that buyers with lower credit scores can qualify for. These are good options for people who have had credit issues in the past, but some of them come with additional fees you will need to pay. Speak to a few local lenders or mortgage brokers to talk through which options might be best for you.<\/p>\n While some buyers may feel more comfortable paying off their existing debts before taking the leap into homeownership, it\u2019s not a requirement. When you\u2019re applying for a mortgage, the lender takes a close look at your debt-to-income ratio.3 <\/sup>If you want to calculate this on your own, add up all of your monthly debt payments and divide those by your monthly income. When you\u2019re lender does this, they\u2019re trying to make sure that you will be able to afford your monthly mortgage payments along with your other existing payments. If your income is high enough to allow you to make all of these payments each month, having a student loan will most likely not stop you from getting a mortgage.<\/p>\n How much house you qualify for and how much you can afford are two totally different numbers. When you prequalify for a mortgage, your lender will look at your income, debt, assets, credit score, and financial history to determine how much money you might qualify for.4 <\/sup>For some people, this number might be much higher than you thought because lenders tend to approve for the highest amount they think you can afford. But that doesn\u2019t mean that\u2019s how much you should borrow.<\/p>\n Instead, figure out how much house you can actually afford. An online mortgage calculator<\/a> can be a good first step in determining this number. We recommend thinking about what you want your monthly payment to be as a starting point. And remember to include your principal, interest, taxes, and<\/em>, insurance. You should also think about ownership expenses that aren\u2019t part of your monthly payment, like HOA dues and maintenance.<\/p>\n You\u2019ve heard the phrase. Location, location, location is basically the real estate industry\u2019s motto, but we\u2019ll let you in on a little known secret: It\u2019s not always true. Yes, location is great to consider when it comes to school districts and commute times, but you also need to think about how the home will function for you and\/or your family\u2019s lifestyle. If a family of five is choosing between a one bedroom condo in the bustling city center and a 4-bedroom home out in the suburbs, the latter is probably the best, most functional choice for them. Also, by buying in a less sought after neighborhood, your property taxes will most likely be much lower!<\/p>\n Obviously, you might still want to choose an area with great resale potential, and this is something that your agent can speak to you about. They\u2019re an expert in your city and are constantly monitoring buying and selling trends.<\/p>\n You\u2019ve seen that famous house hunting show. And while we have our suspicions about how real it is, the one thing they get right is that almost every buyer needs to compromise on something. Yes, the perfect house that meets every item on your wishlist is probably out there, but it\u2019s also probably double or triple your budget.<\/p>\n A long wishlist can be a great starting point for figuring out what you want and don\u2019t want, but we recommend narrowing that wishlist down to the top five things that are important to you in order of priority. We also recommend noting on your wishlist what your absolute deal breakers are, like \u201cmust have a yard for our dog,\u201d and noting what you can live without, like \u201cheated bathroom floors.\u201d<\/p>\n This is a great list to discuss when you first start talking to an agent. A good real estate agent will be able to look at your list and find properties that might work for you. By coming to that first meeting with realistic expectations and knowledge about home buying rather than a bunch of myths heard here and there, you\u2019ll be able to start the process off on the right foot and be in your new house in no time.<\/p>\n \u00a0<\/strong><\/p>\n Whether you\u2019re a first-time buyer or a seasoned homeowner, there\u2019s no reason to go through the home buying process without an advocate on your side. We\u2019re here to answer your questions and do the hard work for you, so you can spend your time dreaming about your new home. Call us today to schedule a free, no-obligation consultation.<\/p>\n <\/p>\n \u00a0<\/strong><\/p>\n Now that we\u2019ve cleared up these common homebuyer myths, find out if you know the steps you should take to prepare financially before you apply for a mortgage. Contact us to request a complimentary copy of our \u201cHome Buyer\u2019s Guide to Getting Mortgage Ready.\u201d <\/em><\/p>\n <\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n <\/p>\n Sources:<\/p>\n https:\/\/www.realtor.com\/advice\/finance\/realtor-fees-closing-costs\/<\/a><\/p>\nDON\u2019T FALL FOR THESE COMMON HOME BUYER MYTHS<\/strong><\/h3>\n
Myth #1: You need a 20% down payment. <\/strong><\/h4>\n
Myth #2: Real estate agents are expensive. <\/strong><\/h4>\n
Myth #3: Don\u2019t call a real estate agent until you’re ready to buy. <\/strong><\/h4>\n
\n
\nMyth #4: Fixer-uppers are more budget friendly.<\/strong><\/h4>\n
\n
\nMyth #5: Your only upfront cost is your down payment. <\/strong><\/h4>\n
Myth #6: You need a high credit score to buy a house. <\/strong><\/h4>\n
Myth #7: You can’t qualify for a mortgage if you’re still paying off student loans.<\/strong><\/h4>\n
Myth #8: You should base your budget on what your lender approves.<\/strong><\/h4>\n
Myth #9: It’s all about location.<\/strong><\/h4>\n
Myth #10: If you look hard enough, you’ll find a home that checks every box on your wishlist<\/strong>.<\/h4>\n
WE\u2019RE HERE TO HELP<\/strong><\/h3>\n
\n\n
\n Get a FREE copy of our Home Buyer\u2019s Guide to Getting Mortgage Ready<\/strong><\/p>\n \n