We all have some preconceived notions about buying a house, especially if you’re a first time home buyer who hasn’t ever gone through the process. Sometimes people don’t even consider buying because they believe these things. So let’s bust some myths to help you have a smooth home buying process and set you up for success.
Myth #1: You Need a Perfect Credit Score to Buy a House
If you want to get a conventional loan, having bad credit is going to be an issue. However, there are FHA loans that can help buyers with credits scores under 600 qualify. Of course, there is a lot to learn about these kinds of loans and you want to be prepared before you jump into it.
If you are thinking about buying a home and worried about your credit score, we suggest your first step should be to talk to a trusted lender. We can connect you with someone who will explain your options and help make homeownership possible for you.
Myth #2: It’s Cheaper to Rent than Own
Renting can be a good short term solution for some people, but if you plan to stay somewhere long term, buying makes so much more sense. When you own your home, you will have steady mortgage payments when you choose a fixed-rate loan. Rent prices can skyrocket year over year and your landlord could ask you to leave if they plan to sell the home or for other reasons.
Right now, we are seeing extremely high levels of inflation and rent prices are significantly rising in Philadelphia and around the nation. There are even some cases where there are bidding wars for rentals. When that is the case, looking into buying a home is a no brainer.
Another factor to consider here is when you own your own home you are building equity for yourself. You have made an investment and if you chose a good property, then you are earning money through equity as the value continues to appreciate. As a renter, you are essentially throwing that money away and helping your landlord build their equity and pay their mortgage.
Myth #3: All Real Estate Agents are the Same
Some people think that all real estate agents are the same and it doesn’t matter who you choose to represent you when buying a home. This could not be further from the truth. You need to work with a realtor who can prove they have your best interest in mind. Some agents will not show you the dedication, care or knowledge that you need to have a successful home buying experience. Choosing a real estate agent who understands the local market you are in and who has experience and training is extremely important. The real estate market can be very tricky to navigate right now. You might experience bidding wars, waiving contingencies on your offer, low home inventory etc. The right agent will help you navigate that like an expert and even go above and beyond to create the right opportunities for you. Some people think they don’t even need a realtor at all and they can do it all on their own. This is a big risk to take. You might be able to see some listings online and think that’s all there is to it. But there is so much more to it and you will be thankful that you chose a realtor.
Myth #4: You Need a 20% Down Payment
This might be the biggest myth when it comes to buying real estate. If you are able to put 20% down on a home, that is great and will ultimately save you money in the long run. However, you absolutely do not NEED 20% down to buy a home. In fact, you can put as little as 3.5% down with an FHA loan. When you don’t put 20% down, you will pay Private Mortgage Insurance, also known as PMI. With this, many lenders are happy to offer loans with 5% to 10% down. This gives you the opportunity to start your home buying journey quicker if you do not yet have enough savings for the 20% down payment. There are also tons of options for down payment assistance. Many programs were made to help first time home buyers, low-income buyers, etc. Don’t take yourself out of the game before you even start. Explore your options by talking to a trusted lender and agent!
Myth #5: Schools Don’t Matter if You Don’t Have Kids
You might not even think about schools when buying a house if you don’t have children. However, schools play a big role in the value of your home. If you purchase a home in a neighborhood with a great school system, that makes the value of your home go up. Vice versa - if you purchase a home in an area that doesn’t have great schools, that could affect your home’s appreciation value.
You might absolutely love the house and don’t care about the schools, but if you plan to sell the home in the future it could cause an issue. It’s not a deal breaker, it’s just something to note. So whether or not you have kids or even plan to have kids, pay attention to the schools in the area.
Myth #6: You Shouldn’t Buy a House in the Fall or Winter
Many people say that Spring is the best time to buy a house. But the reality is, there are so many buyers during that time leading to competition and higher home prices. Buying during the “off-season” could actually benefit you more. For example, there could be less competition in the fall and you might be able to move quicker because the sellers are motivated to close fast. What it all comes down to is when is the right time for you. Pay attention to the market so you are informed. More home inventory means less competition. As more homes come onto the market, that could be your indication that it’s time to jump on the opportunity.
If you’re ready to start the home buying process, please reach out to us and we can help you find the home of your dreams! We can also connect you with a trusted lender.