Home Buying Myths

So you may be thinking about buying a home, and if this is your first rodeo, then you probably have a ton of people giving you advice and tips on how to go about the home buying process. There are many myths in relation to home-buying that you should be aware of, because after all, this is one of the biggest decisions that you will ever make.

The first myth I would like to tackle is, “You do not need a real estate agent.”
Well you certainly can do it on your own, but why would you when you can hire a professional? It is similar to driving a car without ever taking a driver’s education course. You’ve heard about it and it seems easy enough, but you don’t really know what you are doing. When making such a huge life decision, it is very important to have someone beside you to hold your hand and help make sure that you make the best decision possible. Often times, real estate agents have knowledge and access to listings that may not be public knowledge. Realtors are also experienced in negotiating so that they can get the best deal for the home-buyer- and this quality alone can make it worth it to hire a real estate agent to assist you in the process. A buyer’s agent can also help lead you away from a property that has problems that could potentially turn into disasters. Finally, there is a lot of paperwork and there are a lot of laws that are necessary to know when buying a home, so it usually is best to sit back and let your real estate agent use his or her expertise to find you the perfect home.

The next myth that we will discuss is that, “You must put down a 20% down payment.”
You have options. You do not have to put down 20%. It does help to put down a 20% down payment because it will lower your payments every month, as well as your interest rate costs. In fact the average down payment percentage for Americans is closer to 13%, according to a report made by BMO Harris. In fact, your down payment can actually be as low as 3%, according to Fannie Mae. This statistic alone busts the myth. It is important to talk to your real estate agent, if you have one, and speak with your lender to explore all of your down payment options.

Moving on to myth number three, most people believe that “You should only ever choose a 30-year fixed mortgage.”
You may be surprised to hear this but a 30-year fixed mortgage is not your only option. It certainly is the most traditional option but it is not the only one. Shorter life mortgages may have higher payments but they usually have must lower interest rates. This decision should be explored and discussed with an experienced banker or a financial advisor to help the home buyer decided what option is best for him or her.

Myth #4, “All you need is a down payment.”
It would be cool if this myth were true, but unfortunately it is not. There are many other costs that are associated with buying a home that a lot of first time home-buyers have not been warned about. There are often times closing costs, lawyer fees, appraisals and inspections which then sometimes lead to repair costs, and home owners insurance amongst many other things. It is always good to be prepared for these sort of things to come up. Although many of these costs may seem like an inconvenience, they often times will protect you from damages and larger costs in the future.

The fifth myth – “A home inspection is not necessary.”
A home inspection is usually optional but it is very necessary. It may hold up the buying process and can be considered expensive but in the long run it can save you from a lot of pain, misery, and financial loss. Even if a home is brand new, it may have problems that you cannot see. A home inspection is a great weapon to use when it comes to negotiating a price on a home. You may spend up to $400.00 on a home inspection but it could be the difference in negotiating thousands of dollars to come off of the asking price.

These are just a few often myths that most first time home-buyers believe to be true. Our advice to you would be to do your research. This is one of the biggest financial decisions that you will ever make and it is so crucial to really know what you are doing or to hire someone who does so that you can rest easy at night (in your new home) knowing that you made the right decision.