Most Common Myths About Home Buying - American Trust Escrow
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Most Common Myths About Home Buying

Most Common Myths About Home Buying

iStock_000026660680XSmallToday, buying a home is a completely different process than it was before the housing market crash. This year has been a particularly busy year for home buying, but there are still a variety of myths about home buying that interested home shoppers buy into. Here’s a look at some of the most common ones!

  1. A 20 Percent Down Payment is Required: While it’s important to save as much money as you can for a down payment, you don’t necessarily need 20 percent to purchase a home. The more money that you can put down, the smaller your loan will be, and thus, the less your monthly mortgage payments will be. There are conventional loans that only require 3 percent down, and the VA home loan program will cover 100 percent of the purchase price of a home for veterans.
  2. Those With Less-Than-Perfect Credit Will Never Get a Mortgage: While this may have been true in the midst of the housing crisis, lenders are more willing than ever to work with interested buyers. Even if your credit isn’t perfect, you should still sit down with a mortgage broker to discuss your options. People with bankruptcies, foreclosures and more are able to obtain a loan, so don’t count yourself out just yet.
  3. You Should Explore Only Fixed Mortgages: David Reiss, a professor at Brooklyn Law School who specializes in real estate, debunks this myth by saying: “The necessity of getting a 30-year fixed rate mortgage is one of the biggest myths about home buying. The average American household stays in their home for about seven years. Typically, 30-year fixed rate mortgages have higher interest rates than adjustable rate mortgages (ARMs). Home buyers should take a hard look at their plans for the new home.”
  4. You Can Save Money by Eliminating the Realtor: Many people make the mistake of believing that they can navigate this process alone, and eliminating a realtor will save them money. Typically, an agent’s commission is paid by the seller anyway, so you will never see this cost. Real estate agents are experts at negotiating, they know the local market where you’re shopping, and they can handle the mounds of paperwork required to complete a real estate transaction.
  5. Right Now Is The Time To Buy: The market has been on fire for much of 2013, which has prompted many into the buying frenzy. But buying a home is a big decision, so you should ask yourself the following questions before you take the plunge. “Do I have the time and financial wherewithal to maintain a home?” “How long do I plan to stay?”