It’s common for both first-time homebuyers and experienced homeowners to feel overwhelmed by the process of purchasing a house. Being one of the largest investments you will ever make, being fearful financially is normal! However, the worst mistake is listening to the myths and misconceptions that often make the experience even more concerning.
If you’re thinking of buying this year, don’t let these misleading ideas deter you from your goals. Speak to Ellie Yung, a real estate professional who has extensive experience in financial advising and long-term investments.
Myth #1: Renting is cheaper than buying. You need a credit score of 700 to get a loan….FALSE! 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, under certain market conditions and definitely not in a seller’s market….FALSE! While competition has been fierce, 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! Owning real estate is the best type of asset to have!
Myth #3: It’s cheaper to rent than buy….FALSE! 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. Speak to a lender to see what options are available and best for you!
Myth #4: You should only get a mortgage from your bank…FALSE! 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. Banks also have overhead with paid employees while mortgage companies run off commission, so rates may slightly be better. It all depends on what programs banks and mortgage lenders negotiate to have, so shop around!
Myth #5: You should waive your inspection to win a bidding war…FALSE! 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. Instead, offer a reduced contingency period. Normal inspection contingency is around 14 days, but offering a 7 or 10 day inspection contingency would still be considered a strong offer.
I work with hundreds of buyers and sellers over the years and walk through each step of the buying and selling process so all parties are comfortable and knowledgeable about what to expect. Communication is key! If you have questions about buying or selling a home, get in touch with me today!