Buying your first home is no easy task. In fact, there are several myths and misconceptions about the entire process, which can cloud one’s understanding even further. If you are in the process of searching for the perfect place to live, continue reading. Here are the top misconceptions about buying and owning your first home.
Buying a fixer upper is the best way to get a solid deal
Here’s the first out of many home buying myths.
Many people are under the impression that purchasing a fixer upper is the best way to get the most value for your money. After all, these homes are cheap — especially compared to some brand new homes on the market.
However, this isn’t always the case! When you add up all the money you’ll have to spend to make the house presentable; you’ll find that the price is almost astronomical. Home improvement shows always make the process look seamless. If you are approaching this new home with no experience with flipping homes, you can wind up with more on your plate than you imagined. Don’t take this risk with your first home, unless this is a process you feel comfortable conducting. Home improvement shows may be able to get a better price on certain services. Who wouldn’t want to advertise their business on national TV?
A 20% deposit is mandatory when purchasing the home
Many people believe that they have to put a large down payment before they can buy their desired home. In fact, that is not the case at all!
The truth is that most required down payments fall into the 3.5 range. Certain people, like veterans, may not have to make down payment. Their deposit can be as low as zero.
VA loans can also help you finance a home for a lower rate. Buying a home can be in reach for nearly anyone.
You can get more value if you buy the worst house in the best neighborhood in the area
If you can’t buy a mansion, might as well buy a modest home in the best neighborhood, right? Well, if you’re looking to get the most value for your money, this may not necessarily be the case.
Some of these ‘bad’ homes can still be expensive. Not to mention, they may also follow strict HOA guidelines. They may have control over what color you can paint your door. The fees each year can also be outrageous.
Buy your home at a certain time of year
Here’s another one of the most popular home buying myths.
Many people believe that springtime is the best time to buy. They think that there are more houses available on the market. While this is true, this surplus also means that there is more competition. Finding a house that fits all of your needs and budget may be harder this time of year. Winter is a great time to buy, as prices have been slashed.
Finding homes online is not an effective way to browse
Looking for home through a real estate website is an excellent way to narrow down your options. You can use a search filter to find the perfect home. If you want a house with a specific amount of bedrooms, ample yard space, and a large kitchen, you’ll find dozens of homes in seconds.
Touring the house is another story. Always see the home in person before making any immediate decisions. What you see online may not be the full picture of what you’re getting.
Income rules can prevent you from getting the home you want
Thi sis a popular homebuying myth. Many believe that there is a 36 percent income rule that applies to new homeowners. The rule states that you must cap the list of homes you can buy based on a 36% income to mortgage rule. However, this isn’t always necessary. The ability to repay the mortgage loan is what matters the most. This is often what banks will look at when you’re trying to purchase your first home.
Some people can skip the home inspection process if they are in a seller’s market
This is another one of the biggest home buying myths! The truth is that home inspections are crucial when you are buying a home. They ensure that your home is safe for you and your family. There can be dozens of issues that are invisible to the naked eye. This can include bad electrical work or roofing damage.
Bad credit can prevent you from buying a home
Many people worry about their eligibility to buy a home when their credit score is low. A low credit score can be anything below 650. It won’t completely disqualify you. Certain programs can help you raise your credit score if you have a poor credit history. The important thing to note is that you should keep your utilization percentage at 30%.
You should opt for the lowest interest rate when buying a home
If you pay several thousands of dollars for points towards a lower interest rate, this can end up costing more in the long run. Make sure to keep this in mind when learning more about home buying myths.
You don’t want to pay more than you have to.
You have to pay off your adjustable rate home immediately
An adjustable rate mortgage starts with a locked-in interest rate. It fluctuates after the agreed upon time period. You won’t have to pay the loan off completely during that agreed time period. It may take 30 years to pay off the loan. It’s the interest rate that can change upon the agreed date after signing for the home.
You have to wait for houses to be placed on the market
The truth is that you don’t have to wait an entire year before browsing the market if you don’t initially like what you see. This would be so inconvenient and is one of the largest home buying myths out there.
Work with an agency that isn’t afraid to talk to homeowners about whether or not they are selling their home. If you are working with the right service, they will find creative new ways to provide you with a list of viable homes.
Lowballing is okay
This technique is as old as bargaining itself. However, if you have found your dream home, don’t make a lowball offer. You can risk losing the home by offending the seller. You should ask the seller if there have been multiple offers. Stick with a competitive rate, and that will get you noticed.
Everyone needs to by a home for the security factor
As far as home buying myths go, this is one of the most popular ones you need to know about. Many people think that buying a home is one of the best financial choices you can make. However, this process isn’t for everyone. If you’re purchasing a home because you think it will make your friends and family proud, you’re buying one for the wrong reasons. You will end up in a hole of debt if you’re not prepared to make this decision.
You also need to consider the location. What if you don’t want to move in five or ten years? What will you do with the home?
You will also need to find a local plumber and make various decisions when it comes to the upkeep of the home.
Leasing an apartment or home is a waste
There are many home buying myths regarding renting. But often, renting is a sound decision for many people. It can even save them thousands of dollars. For example, if you’re planning on living in the area for a few years, renting is a seamless and cost-effective process. You won’t have to pay for lawn maintenance or for water damage restoration service.
Zillow data is a reliable way to analyze a home’s stats
Zillow isn’t always the most reliable tool when it comes to browsing homes.
All lenders are of equal quality
When shopping around for a lender, it’s important to note that they aren’t always the same. Lenders can vary in quality and customer service. It’s important to weigh the pros and cons of each lender when deciding to buy your first home.
Buying a one-story home is more cost-effective than a two-story home
This is a broad statement. Mainly, because there are other factors you need to look at when purchasing a home. Buying a one-story isn’t always the best value for your money. Getting around may be easier.
However, a one-story house still requires a great deal of maintenance. You still need to conduct roof repairs and ensure you’re taking proper care of the lawn. Additionally, buying a second story house in areas where the land is limited can be more affordable. Two-story homes can be built on smaller lots.
Commissions for real estate agents are non negotiable rates
You don’t have to settle on one set rate. This number can be up for negotiation.
Saving money on the commission means that you can place this money elsewhere, like the closing costs.
Location is everything
Location is a huge part of the home buying process. But don’t believe these home buying myths. It isn’t everything. You should focus on the functionality of the home, then move onto the location. What will appeal to the buyers when you are ready to sell?
If you’re a millennial, you can’t afford a nice home
Don’t believe the articles. This is just one of many home buying myths. Many home buying myths look down on this group of young people. These myths center on the fact that people younger than 35 can’t afford their own home. The truth is that most mortgages are around $950 a month. A millennial’s monthly income can range, but it is usually around the $3000 a month range.
It is likely they can find a nice home, seeing as they can make well over the monthly mortgage payment.
First impressions should determine your final opinion
Not every seller can afford to fix up their home with nice furniture and decor before placing it on the market. You should look past these factors and focus on the more important ones.
Look at how much natural light you’re getting. What is the price like? What about the square footage?
Is it in a good location, with several restaurants and bars within walking distance?
Are there great schools nearby? You will have to use your imagination if you want to get the best deal.
There are various misconceptions when it comes to buying your first home.
Many people are not aware of these misconceptions and may enter the home buying process blind! There are many issues you have to take care of yourself — such as a water heater leak. However, when it come sot actually selecting the home, the right broker can help you along the way! In case you’re still feeling uncertain about certain aspects of the home buying process, they can help you find the home of your dreams with as little frustration as possible.