As we looked into potentially purchasing a home, we had some preconceived notions. I think every buyer has a few. I personally couldn’t get passed the the fact that a 20% down payment wasn’t required. But after consulting our REALTOR, she debunked most of the myths and helped to make the home buying process smoother and less confusing.
Here are some popular myths and why they aren’t always correct:
I must have perfect credit. — Wrong!
Having a perfect credit score definitely makes the loan process easier and offers lower rates. Working on your credit score before searching for a home is also a great idea. However, if you do not have perfect credit, there are plenty of lenders that can work with you to make your homebuying dreams come true.
I must have a 20% down payment. — Not always.
While it is ideal to have a 20% down payment to get a better interest rate, have a smaller monthly mortgage, and to avoid private mortgage insurance (PMI) — it is by no means required. There are many lending programs that allow you to qualify for as little as 5% down. FHA, Freddie Mac and Fannie Mae have loans which may have a low down payment requirement. The Veterans Administration (VA) offers a no money down program to qualifying veterans, active duty members and/or other qualified categories.
This home is a little over budget. I can’t look at it. — Yes, you can.
I’m not suggesting you search for homes far out of your budget range, but searching just a little above or below your budget can help. For example, if your budget is $310,000 and a home comes on the market for $315,000 it could be possible to negotiate a price within your budget. So why not take a look? This also works the opposite way, there may be a home below budget that you may have overlooked because of your search minimum settings.
I don’t need an inspection for new construction. — Not a good idea!
“It’s new. I don’t need an inspection.” Famous last words. While city or county inspectors may check that the home is “up to code”, those inspectors are not looking for anything except very specific violations. The builder or contractor may not see defects that a home inspector would catch. The home inspection is also a time for the homeowner to learn about the home, features, appliances and maintenance.
Spring and summer are the best times to buy a home. — Don’t ‘fall’ for this one.
This myth continues to be busted. As a buyer, there may be less competition during the fall or winter purely because people still believe this myth. If you’re willing to brave the cold, the winter or fall may be the time to start your search.
It’s going to take months to find a home. — Maybe not.
I can attest to this myth. We thought it would take months to find anything and we found our home the first day we toured homes with our real estate agent. Another reason that it pays to be prepared with your financing, so you can act fast if you find your dream home.
What other homebuying myths should be busted?