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First Time Home Buyer Myths: 5 Common Misconceptions Revealed
A lot of would-be homebuyers decide not to buy a home because they believe it’s too expensive or too complicated. Fact is, buying a home is a lot simpler than you might realize.
Recognizing the most common myths about buying a home – and knowing the truth behind the hype – is the key to helping you decide if homeownership is right for you.
Here are the top 5 first time home buyer myths, common misconceptions about the buying process revealed:
- I can’t afford the down payment. Not too many years ago, lenders typically required big down payments – about 20% of the purchase price. But today, lenders are much more flexible, often accepting as little as 5% to 7% as a down payment. In VA loans, no down payment is required. If you’re short on cash, your lender can direct you to loans ideal for your budget.
- My credit isn’t perfect, so I won’t qualify. While really good credit will get you the best rates, your credit doesn’t have to be perfect to qualify for a mortgage. Especially in the aftermath of the recent housing bubble, lenders know the fallout affected many consumers. As a result, they’ve become a little more lenient in the rates they require to qualify.
- I’ll save money by renting. Most mortgage payments are lower than rent paid for a similar home, and don’t forget: You’re building equity in your own home instead of helping landlords build equity in their properties. What’s more, fixed-rate mortgage payments are locked in for the life of the loan so you won’t get a nasty surprise increase in rent.
- The mortgage process is too complicated. In fact, with online applications and quick decision processes the application and approval processes are easier and faster than ever before. Lenders want to make the process as simple as possible, and most lenders have online or on-call reps to help you figure out any areas that aren’t clear to you.
- The monthly payments will be too much and I won’t be able to keep making them. If you’re paying rent each month, there’s no reason to believe you won’t do the same for your mortgage. And, with so many mortgage products to choose from, you can find a mortgage that suits your budget and your income. Bonus: Paying your mortgage each month on time helps you build a good credit history and improves your credit score.
Homeownership has historically been one of the best ways to build wealth and security for the vast majority of Americans. Don’t let these or other fears stop you from buying a home and taking the next step in securing a great future.