Debunking Myths To Home Buying
Finally ready to make the transition into home ownership? That's awesome, and in this exciting time I'm sure you are turning to friends and family for insight into the process. However, not everyone is an expert, so be careful to do your own research and talk to a real estate agent! In the meantime I'm here to clear up a few myths.
THE FIRST STEP IS SEARCHING FOR A HOME
You know the saying, "Don't put the cart before the horse," well that's important to remember when it comes to buying a home. You don't want to seriously start looking for a house until you have gotten to sit down with a lender and discuss what the bank will qualify you for. If you fall in love with a house that's over what you come to find out you're qualified for you can get your hopes crushed and waste a lot of time. Don't start the process on the wrong foot and make sure the numbers line up!
YOU DON'T NEED A REAL ESTATE AGENT
For starts, when buying a home, 99% of the time the buyer's agent gets paid by the sellers. That random 1% can be for odd circumstances. Which means as a buyer you're getting to use the services of a real estate agent for free. Having a real estate agent on your side means you'll get to see homes that aren't as readily available on public searches, you avoid outdated listings and scammers (there are lots of them), and you have protection, guidance and support when it comes to navigating the negotiations, legalities of contracts and closing process. Why wouldn't you want an awesome negotiator working to ensure you get the best from the transaction? For FREE!
YOU CAN'T BUY A HOME WITH BAD CREDIT
Fortunately for some, this is a myth. Lenders and banks come by the hundreds of thousands and all though there are a few loan options, a lot of lenders can work with credit scores down to the low to mid 500's. Get in touch with an agent to help you connect with the right lender who can help find out if you'll be approved. There is a lot of factors that go into approvals, but your credit is only one of them. You will however be doing yourself a huge favor if you connect with a credit repair specialist to get those numbers in better shape, it may be easier than you think! A better score will lower you interest rate.
YOUR DOWN PAYMENT HAS TO BE 20%
Think you have to sell an arm and a leg to buy a home? Not at all! An FHA loan only requires 3.5% while a conventional only requires 5%. There are a lot of programs that can potentially help you with down payment assistance or be 0% down mortgage. USDA and VA loans are the most popular 0% down programs. If you qualify, this can take a big chunk off the amount of cash you have to bring to the closing table.
DOWN PAYMENTS ARE THE ONLY UPFRONT COST
This is one of the biggest misconceptions. There is a lot of cost that goes into buying a home, and that includes upfront costs. One of the more important ones are a inspections and appraisal. If you are getting a mortgage, the home will have to be appraised. Aside from your down payment, you then have to pay for closing costs. And NO, they are not the same thing. Closing costs can range anywhere between 3-6% of the purchase price. In certain markets, this can be negotiated for sellers to cover by rolling into the offer price. When these important decisions it is smart to discuss them with your agent so that can set clear expectations along the way and let you know your options to set you up for success.
QUESTIONS ABOUT REAL ESTATE?
I would love to be your trusted Real Estate resource! I am a licensed Chicago Real Estate Agent at Main Street Real Estate Group. Whether you live in Chicago or not I'm happy to help you in any way I can or connect you with a recommended agent in your area. Please email me directly at email@example.com, in the meantime for more info check out my real estate website at erinwoodrealestate.com.
Can’t wait to chat and see how I can help you, your next home could be closer than you think!