Home buying is overwhelming for a first-timer, regardless of the excitement and enthusiasm. The first time is fraught with challenges, and myths and misconceptions can worsen the situation. Friends, family, TV shows, and social media posts are often the sources that misguide aspiring real estate buyers. You may struggle to find an ideal property or seal a great deal only because you fall for these myths.
Experts recommend getting your facts right before embarking on the journey so that you can reach your goal effortlessly. It also keeps you from making blunders that can keep you from achieving your dream. Moreover, you can eliminate stress from the process and make the most out of your searches by getting educated. Let us highlight a few home-buying myths you should ditch as a beginner.
Myth #1- Renting is far cheaper than buying
If you believe renting a house is far cheaper than buying one, you must get your facts right. Of course, home ownership requires a hefty upfront investment and long-term maintenance. You have to pay a monthly mortgage, property taxes, utilities, and regular care. But compare it with monthly rents and moving expenses while vacating properties and you will understand that both are comparable. You may actually have to pay only a little more for a monthly mortgage to own a property. Additionally, owning a house eliminates the stress of relocation and rising rents. It also fosters a feeling of stability and security mentioned by Scott Rubzin , founder of Tiffany Property Investment.
Myth #2- You must prepare for a 20% down payment
Many aspiring buyers give up on their dream or postpone the purchase only because they aren’t financially ready to pay a 20% down payment on the property. However, it is a misconception you should steer clear of because you can buy a home at a much lesser down payment. All you have to do is to find the right lender willing to settle for a smaller down payment and provide a loan for the test. Consider the amount you can currently afford, and look for a property that fits into your down payment budget. You can close a deal for your dream home with a smaller amount, provided you are financially aware says George Beatty, founder of Problem Property Pals.
Myth #3- All lenders have the same offer for potential home buyers
Like anything else, shopping for a home loan is a great idea because you can actually save a lot. Remember to compare home loan rates before finalizing a lender to finance your deal. First-timers often fall for the myth that all lenders have the same loan rates for borrowers. But you must ditch the mindset and set aside time for research and comparison as a part of the buying process. You can secure a loan at a lower interest rate and save thousands in the long run. The best part is that you can compare your options online in only a few clicks.
Myth #4- You must have a high credit score
Having a healthy credit score is a plus for home buyers as it makes one a good prospect for lenders. But you have no reasons to worry if you do not have a perfect credit score. You can still buy an ideal home by looking for loans you can qualify for with lower credit scores. However, the interest rates may be a tad higher in this situation, though you can negotiate with the lender. You can work on improving your score if you plan to buy a house because a good number always helps.
Myth #5- The down payment is your only upfront cost
Another myth you must avoid as a first-timer is that the down payment is your only upfront cost when buying a home. Of course, it is perhaps the heftiest part of a real estate deal, but you may have to spend much more. The additional expenses include homeowners insurance, moving costs, title fees, and inspection fees. You will also have to pay a hefty sum to the realtor helping you close the deal. Buyers purchasing old houses may have to spend big on repairs and renovation. Not planning for these surprise costs can disrupt your budget in the long run. So be aware and prepared from the outset!
Buying your first house can be much easier if you know your facts and prepare your finances accordingly. Avoiding these myths is equally crucial because you may make grave mistakes if you believe them. Follow this checklist to ditch the most common ones and set yourself up for a stress-free and effortless property purchase.
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