It’s common for both first-time homebuyers and experienced homeowners to feel overwhelmed by the process of purchasing a house. Plus, myths and misconceptions often make the experience even more confusing.
Myths like: Renting is cheaper than buying. You need a credit score of 700 to get a loan. You shouldn’t buy in a seller’s market. Have you come across any of these?
If you’re thinking of buying this year, don’t let these misleading ideas deter you from your goals.
Myth #1: You need a certain credit score. While mortgage programs do have credit score minimums, you’d be surprised at how low those go. With an FHA loan, you may be able to get financing with a score of 500. (Just know that your score may also affect the interest rate and terms of the loan.)
Myth #2: You should only buy during certain seasons or under certain market conditions. While competition may seem fierce lately, that doesn’t mean you shouldn’t buy a house. As long as you choose a home you can afford and one that will grow in value, it’s still a smart long-term investment.
Myth #3: It’s cheaper to rent than buy. Home prices have been rising lately, but rents have jumped significantly, too. Since homeownership allows you to build equity and wealth over time, it’s important to crunch the numbers before assuming you’re better off renting.
Myth #4: You should get a mortgage from your bank. Your bank should definitely be on the list, but don’t limit your shopping to just them. Get quotes from several banks and lenders to ensure you get the best deal.
Myth #5: You should waive your inspection to win a bidding war. Waiving your right to an inspection might help you beat out other offers, but it can also come back to bite you. Inspections often reveal costly and even dangerous defects, and you’ll want to know about these before deciding to buy.
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