First-time Homebuyer Misconceptions
First-time home buyers are my favorite clients to assist and educate. They have several misconceptions of the home buying process that I get to explain and talk them through. Buying your first home is a big purchase and an exciting time. It is not a simple process, but worth the investment.
Here are the top misconceptions I educate first-time home buyers on.
1. It’s Cheaper To Rent Than To Buy
Rent prices have skyrocketed over the last couple of years making the cost of renting about the same as a mortgage payment. There are several upfront costs with home buying, but when planning long term, buying is cheaper then renting. Be sure to do your homework and carefully evaluate how you want to live and how much you can comfortably afford.
2. You Need A 20% Down Payment To Get A Mortgage
There are several options and programs out there that lenders can explain to you, that have little to no money down. The average down payment for first time home buyers is just 6% according to the National Association of Realtors.
3. You Need Excellent Credit
If you’re looking to get a conventional loan, having bad credit might be an issue. FHA loans though require only a 3.5% down payment and credit scores even under 600 can qualify. Lenders look at a lot more than just your credit score. You should have no more than a single late payment in the past 30 days. No judgments or liens, and minimal debt to qualify.
4. Paying A Real Estate Agent
There is no cost to buyers to use a real estate agent. A realtor has fiduciary responsibilities to protect buyers. They assist with everything from financing, finding that dream home, negotiating the best price, and to a smooth close.
As a first-time home buyer, you’ll want to make sure that you’re getting the most accurate information. It’s important to always ask questions and make sure that you’re making decisions that are right for you.