28 Oct Home Buying Myths, Debunked!
The massive real estate downturn that characterized much of the recession led to many rumors and myths about home buying. Before the mortgage meltdown, virtually any buyer was able to walk into a lender, obtain a loan and often buy a home they could never afford. My how the times have changed!
Today, the home buying process is a very different experience, however, it’s not impossible like many people believe. Here are five home buying myths, debunked!
- Right Now Is The Time To Buy: The national real estate market has been in a bit of a frenzy for much of 2013, and many believe that if they don’t buy right now, they’re going to miss the boat. Buying a home is perhaps the largest investment you will ever make, so you need to be certain that you’re up for the commitment.
- You Need to Put 20 Percent Down: Putting 20 percent down became a necessity during the housing downturn when lenders were much stricter. But there are many conventional loans that only require 3 percent down, not the 20 percent that many believe. The important thing to keep in mind is that the more money that you can put down, the smaller your loan will be. This will bring down your monthly mortgage payments.
- Less-Than-Perfect Credit Means No Mortgage: Lenders were around during the housing crisis, and they know that people faced foreclosures and short sales and some were forced to file for bankruptcy. While their practices have become more stringent, just because you have less-than-perfect-credit does not mean you will automatically be denied a mortgage. Lenders are more willing than ever to work with interested buyers, so make the appointment and see what your particular situation warrants.
- Eliminate a Realtor and You Will Save Money: Did you know that a real estate agent’s commission is generally paid by the seller? Incidentally, eliminating an agent will probably not save you any money. And the headache associated with negotiating and navigating the paperwork required for a real estate transaction makes them worth their weight in gold anyway.
- Fixed Mortgages Are The Way To Go: Ask David Reiss, a professor at Brooklyn Law School who specializes in real estate, about fixed mortgages and you will quickly understand why they’re not the end-all, be-all for financing. He said: “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). Homebuyers should take a hard look at their plans for the new home.”