Home Buying Myths Vs Reality
Dated: April 16 2020
Purchasing a home is, for many people, the largest investment of their lives. It can be overwhelming and many people struggle with where to start. There are many myths about buying a home that causes home buyers to hesitate from taking the first step towards purchasing a home.
1. Myth: It requires 20% down to buy a home.
Fact: There are several mortgages that require lower down payment and down payments vary by loan type. Many home buyers use FHA loans which require a 3.5% down payment. There are conventional loans that require 3-5% down payments as well. USDA loans can be used outside of many Pennsylvania towns and cities that require no down payment and the entire home purchase can be financed. A loan officer can discuss your needs and find the best type of loan for your home purchase.
2. Myth: Student loans will make it impossible to qualify for a mortgage.
Fact: A student loan debt does not automatically disqualify you from being approved for a loan. The size of your loans is not the key factor in determining your eligibility. Your Debt to Income ratio, or DTI is the number that is the key factor. Your DTI is simply the amount of your total monthly debt vs your monthly income.
3. Myth: Buying a home is not a good investment.
Fact: Real estate values, like any asset, fluctuate based on supply and demand. We experienced a significant t adjustment market in 2008, since then real estate values have risen each year to surpass 2008 prices. Historically, real estate has been one of the safest investments. As Mark Twain said, "buy land, they are not making any more of it."
4. Myth: It is more expensive to work with a buyers agent.
Fact: Buyers agents are typically paid by a sharing of the listing agent's commission. It usually costs the buyer very little if anything at closing to have their interests represented by a real estate professional.
5.Myth: Spring is the best time to buy or sell a house.
Fact: Many years ago the real estate market had seasonal shifts in supply and demand. With so much information online it has never been more convenient to buy or sell a house. Most buyers start their search online so fighting the elements has become less of an issue. Homes listed during the perceived slow seasons typically sell just as quickly as during the spring due to limited inventory.
One of the jobs of a real estate agent is to educate their clients, knowledge, and experience can differentiate between real estate myths and facts. Our team shares our experience and knowledge with our clients so that they can make an informed, smart decision in all types of markets(up, down, and in-between). We look forward to helping you when you are ready to buy or sell a home.
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