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Thursday, September 15, 2016

9 Home-Buying Myths You Need to Stop Believing Immediately


9 Home-Buying Myths You Need to Stop Believing Immediately

 | Sep 6, 2016

So you think you’re finally ready to make the jump from renter to homeowner? Awesome! In this exciting but admittedly scary time, you might be inclined to turn to friends and family for advice—especially if they own homes.
But beware, dear home buyer of the future: Those close to you might not be the experts you think they are. You could be heeding bad (albeit well-intentioned) advice without even knowing it.
So we’re here to bust the most common misconceptions about home buying so you can do this thing the right way. Because this is what we do.

Myth No. 1: The first step is looking for a house

lillyking
Perhaps you just want to get a feel for the area. You know, have something in mind before you sit down with a Realtor®. I mean, you’re notreally looking yet, right?
Stop right there. Even if you think you’re just browsing, you run the risk of setting your heart on something, only to have it broken.
“A buyer might be viewing homes that are in a higher or lower price range than what they are qualified for,” says Connie Antoniou, a broker associate in Barrington, IL.
Browsing is always fun, but when it comes to serious home-buying work, you need to make sure your credit is in top-notch shape before you get started for real. Also, don’t forget to get pre-approved for a mortgagebefore you embark on your home-buying journey. This will determine what your budget is.
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Myth No. 2: A 30-year mortgage is the best option

rashida shrug
If you think that the longer you agree to invest in your home, the cheaper the mortgage payments will be, think again.
Most people opt for 30-year fixed-rate mortgages and for valid reason: Monthly payments for a 30-year fixed-rate mortgage are lower than its 15-year counterpart.
But consider this: 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 essentially, with a 30-year loan, you’re borrowing the same amount of money for twice as long—at a higher interest rate.
“If you have $1,000, would you rather put that toward your monthly payment for your house or is there a better place for your money?” asks Samantha DeBianchi, Realtor and founder of DeBianchi Realty in Florida. “If you’re more focused on paying down the house versus the interest, a 15-year option is great.”
No, we’re not saying the 30-year option is a bad one. But keep an open mind toward other loan plans, including an adjustable-rate mortgage. If you aren’t set on staying in your home for the long haul, this could be an ideal mortgage for you.
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Myth No. 3: Your down payment must be 20%

harrison ford
Sure, a 20% down payment is ideal if you want to avoid that pesky private mortgage insurance otherwise known as PMI. But many lenders will be glad to offer up home loans with 10% or 5% down—as long as you’re willing to foot the monthly bill for PMI. Or you can skip the conventional loan and head to the Federal Housing Administration for a government-backed loan with only 3.5% down, if you qualify.
In fact, there are thousands of options for down payment assistance. And while many programs are geared toward low-income home buyers, you don’t have to be destitute. There are lots of different ways you can qualify for help on the local or federal level.
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Myth No. 4: The only up-front cost is a down payment

mcgonagall
As if! For one thing, the seller might determine you’re responsible for closing costs, which can be anywhere from 3% to 6% of the purchase price—and those costs can change drastically depending on your state. And don’t forget the slew of fees, taxes, and other costs for inspections, credit reports, insurance, among others.
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Myth No. 5: You can’t buy with bad credit

HRC
If you’re looking to get a conventional loan, having bad credit might give you a full stop. But FHA loans require only a 3.5% down payment andborrowers with low credit scores—even under 600—can qualify. Keep in mind, though, that FHA loans may look great at first, but they definitely aren’t for everyone.
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Myth No. 6: You don’t need a home inspection

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You might be tempted to believe this tall tale, especially if your housing market is hot and you’re worried your dream home could be sold in a split second to someone else who waives the home inspection.
But beware: Sellers are banking on your skipping this crucial step. It means you’ll get the home as is, including any and all problems that come with it. And sometimes those problems aren’t exactly visible.
“Just spend the money for a really thorough inspection, because in the long run it can save you a lot of money and time,” DeBianchi says.
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Myth No. 7: The asking price is set in stone

kidwhat
Much like buying a car, the offer you make on a house does not need to be the asking price. If you have stellar credit, pre-approval, and a down payment ready to go, sellers might be more willing to negotiate than to wait for another, possibly less awesome, buyer to come around.
Plus, if your home inspection (you know—the one you got because you’resmart) turns up issues, you can use those to your advantage in your negotiations.
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Myth No. 8: You don’t need an agent

good property
You might think you can do this home-buying thing solo. After all, isn’t thatwhat the internet is for?
This is where we tell you to resist the urge to DIY your first home purchase and call a Realtor instead. They’re pros who bring expertise to the table—everything from negotiating chops to turbocharged searching power (yes, they have tools to see stuff you can’t). Trust us: They know more than you do.
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Myth No. 9: Schools don’t matter if you don’t have kids

laurenconrad
We get it: You love the house, it’s in your price range, and you want to move fast. But there’s more to it than that.
The neighborhood you choose matters—both now and later when you might consider selling. Even if you don’t have children, good schools are a sign of a good neighborhood. Also, check out the area’s walkability, your commute to work, and any other features that would make the hood a good fit for your lifestyle—now and a decade from now.




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clear skies,
Doug Reynolds
Realtor
916-494-8441
 

         

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