5 Homebuying Myths Debunked
Taking the plunge from renting into homeownership certainly involves some important steps but may not be as unattainable as you think. From cash to credit you will want to be in a good position to make this move, but there are other things to consider as well as some myths to clear up about the process. Here are some items to set straight.
Homeownership means a lot of debt
Some may think at first that having a mortgage means you will be incurring a lot of debt. While needing to pay your mortgage regularly may be true, homeownership has its advantages. As you pay your mortgage down every month you essentially gain equity. This can almost act as like a savings account in some ways. You can potentially pull out equity down the road and use it for other things, or cash out when you sell. Owning a home with equity is also often a factor in one’s retirement plan.
20% Down is needed
This is often the thought of many because if you put down less than 20% then you will be required to pay private mortgage insurance or PMI. Plenty of people do this and put as little as 5% down on some properties and just have to pay a small monthly fee until their home has more than 20% equity in it. Ultimately it is a small price to pay for being able to own a home sooner than later.
Credit score must be perfect
Surely the better your credit score, the easier it will be to secure a lower interest loan. However, there are mortgage programs that have lower credit and income requirements that you can look into. It is worth mentioning that once you do secure a home loan this can overtime help you improve your credit as well.
Now is not the time to buy
If it is a buyer’s market or if rates are low like they are today, then it can be a great time to buy a home. Also, if you are financially ready to buy and if it is time to upgrade your home then that certainly plays an important role in timing as well. Nobody has a crystal ball to know what will happen tomorrow, but if you prepare well then it is the right time to make a move.
It will be hard to relocate
Some think they don’t want to buy as they will be stuck in a home. First, it is most often recommended to view a real estate purchase as at least a 3 year investment. This can help you manage any market twists while you get a sense of your new space. Should the market remain healthy, you can potentially sell much sooner than that as well or consider renting out the home if need be.
Ready to take the plunge? Contact me today!