Do You Still Believe These 3 Homebuyer Myths?

It’s time to put three big home-buying myths under the microscope.

If you’re in the market to buy a home, you’ve more than likely received a barrage of buying advice from friends, family, news headlines, talking heads on the TV, and trending social media posts. However, much of that information is conflicting, which can leave you struggling to separate fact from fiction. What are the home buying tips you truly need to know? To help you gain some clarity, I’m sharing the three most common myths I find myself having to dispel on an almost daily basis when working with buyers: 

1. Your down payment needs to be 20% or higher. Thankfully for first-time buyers, this simply isn’t true. These days, there are a lot of loan programs that allow you to buy a home with as little as 3% to 5% down; we routinely see buyers in our market purchase with just 10% down. It’s important that you speak with your lender to find out what programs you may qualify for. However, be aware that putting down less than 20% makes you a riskier borrower from the lender’s standpoint, so the lender will require that private mortgage insurance be rolled into your loan. 

2. Buying a fixer-upper is easy and not cost-effective. Too many people don’t fully understand what they’re getting themselves into when they buy a fixer-upper. Before you pull the trigger on a home in poor condition, it’s critical that you have a contractor come out and give a professional estimate of what certain projects would actually cost you. I also recommend that you ask your agent to show you both remodeled homes and homes in terrible condition so that you’re better able to see the difference in cost. Oftentimes, it may be wiser to spend more money upfront to buy a home that’s turnkey perfect than end up spending that same amount of money later as you try to make a cave into a castle.

“A home is one of the best financial assets you can own, so don’t let a so-so credit score stop you.”

3. You have to have a credit score above 780 to qualify for a loan. In reality, you can get a decent loan with a credit score as low as 640. Of course, if you have a lower credit score, you’ll be paying a higher interest rate. Nevertheless, there are solid options out there for you, with FHA financing being just one great example. A home is one of the best financial assets you can own, so don’t let a so-so credit score stop you. 

Hopefully you found this exercise in myth busting to be empowering. If you have questions on any of the myths I mentioned or want help in the buying or selling process, please feel free to reach out to me via phone or email. I’m always more than happy to help!