Don’t let these myths stop you from buying your dream home.
If you are getting ready to buy your first home, then you may be feeling a bit nervous. Unfortunately, there are a lot of mistruths out there that can make your anxiety worse. To ensure that nothing holds you back from closing on a great property, here is the truth behind some of the most common misconceptions about buying a home.
- Myth 1: You need a 20% down payment to get a mortgage.
While this may have been true a few decades ago, house hunters no longer have to worry about putting down such a significant amount of money. To make homeownership more accessible, the government created the Federal Housing Administration, which offers something called FHA loans. These loans allow a borrower to secure a mortgage so long as they have a minimum credit score of 500 and can have a 10% down payment for the home. With these loans, the higher your credit score, the lower the down payment you need to put down. For instance, if you have a credit score of 580, then you would only need a 3.5% down payment to qualify for an FHA mortgage.
- Myth 2: You can save money by ditching your real estate agent.
With all the online resources available to them, many house hunters think that they can handle the home buying process all on their own. However, this move could end up costing you in the long run. When you have a qualified real estate agent on your side, you can count on their industry connections, negotiation skills, and legal expertise to ensure that your real estate transaction proceeds smoothly. Additionally, while real estate agents typically get a 3% commission on the homes they sell, the home buyer does not pay this commission. Instead, it is built into the home’s selling price. So, because you will have to pay the home’s purchase price anyway, you may as well get value by working with a real estate agent.
- Myth 3: It’s cheaper to rent than buy.
Some people believe that it’s more cost-effective to rent a home or apartment. However, because rent prices have skyrocketed over the last couple of years, this is no longer the case. In fact, the monthly rent on an apartment can easily be more expensive than the mortgage payment on a home. While buying a home does require a higher up-front cost, this investment will be worth it in the long run.
Don’t let these common home-buying myths stop you from closing on a great property. Once you’ve found your perfect home, make sure you protect it with the right homeowners insurance. For assistance with all your coverage needs, contact an insurance professional at Westwood Insurance Agency today.