It’s a new year which means many people are setting goals, and maybe one of those goals is to buy your first house or move into a new one. For many first-time buyers, there are plenty of rumors or myths that you might hear from those in your circle of friends, family, or coworkers. It seems everyone has a couple of house shopping stories they are willing to share, either a fairytale version of the one where they got super lucky fell in love with the first house they saw and the offer was accepted and they moved in without an issue, or the absolute nightmare of a story where anything and everything went wrong from lending issues, inspection scares, and paying for a house they couldn’t afford. I’ve outlined four common myths that might scare you enough to keep you on the sidelines of the home buying process, but the fact is these are just myths, and we can debunk them to get you happily searching for the right home. 

Myth #1: Your down payment must be at least 20% of the purchase price. This is not true, there are a number of different options even for conventional loans that don’t require you to have this large of a down payment plus closing costs for a loan. In fact, I work closely with a lender that offers a zero-down conventional loan with a strong credit score. Other loans such as FHA can have down payment options such as 3-5% as well. Of course, every situation is different and you can certainly put a large down payment of 20% down but don’t let not having that amount keep you from looking. 

Myth #2: Homes can pass or fail inspections. Not true, inspections do not pass or fail homes, instead an inspection provides a detailed report explaining their observations of the home in its current condition in a summary outlining the economic life left on major things in the home such as plumbing, electric, roof, mechanicals, and more. Many inspection companies offer additional services besides just a standard home inspection such as mold, radon, termite evaluations, and more. While in competitive situations sometimes an offer that has waived inspections can be more attractive to a seller, when working for buyers it is always their right and in their best interest to have an inspection, I find this is especially true for a first-time buyer. However, some buyers may be comfortable taking on a risk of a home without an inspection or have a family member that is a trusted builder or tradesman that could help if needed. 

Myth #3: My bank will give me the best mortgage. Unfortunately, this is not always the case. Having personal or even business accounts at a bank and a good relationship with them is certainly great, but not every banking institution offers the same products when it comes to mortgages or home loans. Besides banks and credit unions there are also mortgage brokers that have access to several lenders and can shop the market giving you a wider selection of loans. Some smaller banks or credit unions also have more freedom or choice when it comes to taking on specific kinds of risks such as non-warrantable condos. I’m thankful to work closely with several different loan originators who are only a call or text away even on the weekends to make sure we can not only get you pre-approved for the best loan but can also get it closed on time.

Myth #4: You can time the real estate market. As we are in a competitive market for buyers now, you may hear rumors of people wanting to wait it out or waiting for a hypothetical crash. Unfortunately, many people that are renting and waiting it out aren’t putting themselves in a better position by waiting. The increasing rental prices and shortage of units coupled with potentially rising interest rates mean that instead of buying a home last year or 6 months ago, they would now potentially be paying more for that same house and now have lost the potential equity that would have been built in that timeframe as well. As for another real estate crash similar to that in 2008 or 2009, the likelihood of that is not good. There are many laws and changes and regulations that have been put in place to avoid that exact situation. 

If buying a new home is one of your goals for 2022, don’t let the rumor mill of myths keep you on the sidelines. Come straight to the source, by talking to a realtor (like me!) or let me connect you with a trusted lender of mine so that we can give you the facts and help you determine what is best for your situation. 

Posted by Ariel Christy on
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