Busting Home Buying Myths

Dated: 06/01/2020

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Busting Home Buying Myths

Buying a home, especially for the first time, can be intimidating. There are many myths that surround the home buying process. These myths often dissuade people from pursuing their home buying dreams. While some myths have roots in reality, the truth will help you on your way to your perfect home. We're here to bust the top seven home buying myths.

Myth #1: Lenders require a 20% down payment

Some people think it's not possible for them to purchase a home because they don't have a 20% down payment. However, a down payment can actually be as low as 3.5% with a mortgage backed by the Federal Housing Administration (FHA). There are many loans available from government and private programs that only require a down payment of 3.5-10%.

Myth #2: I can't afford to work with a real estate agent

In actuality, the real estate agent's commission is typically paid for by the seller not the buyer. Home buyers get to work with a realtor for free - which means access to listings, experience negotiating, and loads of helpful advice.

Myth #3: The first step in the process is looking at homes

While looking at homes might be the most fun part of the process, it is not where you should begin. The first step is to get pre-approved and pre-qualified by a lender. This pivotal first step will insure you are looking at homes you can actually afford.

Myth #4: Renting is cheaper than buying

When you are renting, you are not building equity through ownership. In addition, with annual rent hikes, your monthly mortgage payment will often end up being cheaper than what you would pay in rent.

Myth #5: I should choose a mortgage with the lowest interest rate

Not so fast! You need to be sure to investigate hidden costs within a mortgage. The lowest interest rate will not always be the most cost-saving way to go. Be sure to evaluate the total cost of the loan - including various charges, fees and insurance - before deciding what mortgage to go with.

Myth #6: All I need to save for is the down payment

The down payment is not the only cost associated with buying a home. You also need to save up for closing costs, attorney fees, and insurance premiums. Closing costs typically amount to 3-6% of the purchase price of the home.

Myth #7: It's a good idea to wave the home inspection to make my offer more competitive

We almost always recommend getting a home inspection. Home inspections help you find hidden problems in the home, even if it's a new build. The inspection can help you re-negotiate with the seller if issues are found, and will also give you helpful maintenance tips for the future.

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Tricia McCullough

From farming in Warden, WA, to living in Australia and then back to Wenatchee, I’ve always been profoundly aware of the fundamental need to help others. Whether through their financial picture or he....

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