Most of us have grown up dreaming of owning our own home one day. However, many Americans today still believe many misconceptions about what is required to purchase a home. After reviewing the list here, you may realize that you’re more prepared than you think.
“Renting is always cheaper than buying a home”
Renting may be a good option if you plan to move frequently. It usually requires roughly seven years of home ownership to offset the cost of renting. With that said, if you plan to stay in your home for a longer period of time, buying is typically the better financial choice. Assuming that your home rises in value, you should stand to make a decent profit when finally decide to sell. Another benefit is not having to worry about any increases on your mortgage as long as long as you have a fixed rate mortgage. If you are renting you never know when the landlord will approach you for an increase in rent.
“You need to have 20% for the down payment”
While 20% is the industry standard, many people are approved for a mortgage loan that requires much less down. Talk to you bank or lender about your situation. Loan programs through the VA, FHA and USDA all have low down payment programs if you qualify.
“Once you’re pre-qualified you’re guaranteed the loan”
Pre-qualified simply means that, it does gives you an idea of what loan amount you should expect from your lender. However, pre-qualification usually does not include a credit report analysis, so if you have a shaky credit report you may still be denied the loan.
“30-year fixed-rate mortgages are the best option”
A traditional fixed-rate mortgage is what most Americans choose based on their situation and it is what most lenders use as a starting point. However, there are shorter fixed rate mortgages that will have a higher monthly payment, but will save a lot in interest charges. This may be a good choice for you if you are looking to not pay as much interest and fees. Look at all of your options.
“Mortgages are the same with every lender”
All lenders offer a variety of products, interest rates and fees for mortgage loans. Not all lenders are right for every customer, so be careful to choose one that fits your needs. You want a company that you can trust to deliver the mortgage package they promised and provide consistent service. Make sure you ask your agent for advice about lenders as well as friends and family who have had positive experiences.
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We are a full-service Real Estate Agency that will manage the entire home selling process from listing to closing. You get everything you would expect from a traditional Real Estate Agent but with the added benefit of working with a technology-enabled and customer-focused team of Agents. Our results speak for themselves.