Home Buying Misconceptions
“To buy a home I need to have perfect credit” Wrong However your credit does have an impact on whether an individual will get approved to buy a home. There are several mortgage products available for home buyers that allow credit scores in the 620’s & in some cases as low as 580 we’ve personally seen get approved. “It’s important to understand that while you don’t need to have perfect credit to buy a home, having a lower credit score will impact a mortgage. The biggest impact a lower credit score will have is the interest rate a buyer is able to secure. The lower the credit score, the higher the risk for the lender, therefore the higher the interest rate.”
The misconception of interested home buyers believing that when buying a home, it consist of a large amount of cash to be put towards a down payment. According to rochester real estate “The most popular percentage that people believe is required for a down payment is 20%. There are actually many ways that a home buyer can buy a home with little money down. One of the most popular ways to buy a home with very little money down is a FHA, Federal Housing Administration, mortgage. A FHA mortgage allows a buyer to put as little as 3.5% down towards a home. Obviously 3.5% down is much different than believing you need to have 20% down to buy a home.
Also “To buy a home all I need is the down payment” wrong Even though a large amount of money is not required for a down payment on a home, another home buying misconception is the belief that the only money needed to buy a home is the down payment.
“There are many costs that are associated with buying a home, many of which you may not be familiar with. Some of the costs that you can expect when buying a home include;”
- Real estate taxes
- Bank appraisal
- Mortgage application
- Underwriting fee
- Attorney fee
- Various inspection fees (ex; home inspection, radon test, septic inspection, etc…)
- Mortgage insurance
Another misconception is “to buy a home its not important to have a real estate agent. It is possible to buy a home without the assistance of a real estate agent, but why would you do such a thing?
“First it’s important to understand that in the majority of situations, a buyer will not be responsible for paying their real estate agent. Having a top-notch buyers agent when buying a home can make the process much easier and less stressful than not having a buyers agent. It is important to remember when deciding on who to choose as a buyers agent, that all buyers agents are NOT the same.
It’s strongly recommended when deciding on a buyers agent that you know how to properly interview prospective buyers agents. Also make sure you don’t select the first agent you speak with because they are your colleagues brother or sister. Having a top-notch buyers agent can not only make the home buying process less stressful but also can give an advantage in a competitive sellers market.”