Home Buying Myths

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Although the internet can be a great resource for a variety of information, a lot of that information is incorrect. One of the most important and expensive decisions in your life, home buying, tends to circulate a lot of misinformation. Most of that misinformation is in regards to how much of a down payment you need or what your credit score needs to be. Let’s go over the real facts about buying a home and knock those myths out, so they don’t hinder your ability to purchase!

CREDIT SCORES

Though it may come as a surprise, you don’t need a perfect credit score to purchase a home. Traditional bank lenders will work with credit scores as low as 640, but your agent can also get you connected with local lenders that accept credit scores as low as 560. Although there are other required stipulations to qualify for the loan, you don’t need a perfect score in the 700’s or 800’s to get approved for a mortgage.

DOWN PAYMENTS

You don’t have to sell an arm and a leg to be able to purchase your dream house. There is a huge misconception that you need to pay a minimum of 20% down to buy. That information is outdated. These days, there a large variety of loan programs that only need an average of 3-5% down. Based on your income or military status, you may even qualify for mortgage programs that require 0% down. Although you’ll expect to pay an additional 3% in closing costs, which is separate from the down payment, this is still significantly less that 20% of the purchase price. If you’re in a buyer’s market, you may even be able to negotiate for the closing costs to be covered by the sellers.

Be sure to connect with a local me to ensure you have the right facts. Don’t let online myths persuade you into thinking you can’t qualify or afford to buy a home. There are a variety of programs to help you get into your dream house. Since these vary by county to county, and state to state, it’s imperative to call me and let me fill you in on the facts.

 

Call or text me at 251-463-9101.

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2019 Can Cost You Tens of Thousands

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“I’ll hold off buying a home until next year.” If you’ve thought of purchasing a home, but don’t want to deal with the process now, you’ve probably had this thought cross your mind a time or two. A pretty common tendency to hold off things on our to-do list, especially the ones that seem like a lot of work. But would you hold off the task if I told you that waiting could make a difference of tens of thousands of dollars? Meaning it could cost you a $10,000-$50,000 (or more) difference to get the home you want today, in 2019’s market.

It’s anticipated, by the national historical trend report, that homes are on the rise by over 5% each year. That house you’ve been eyeing online, listed for $225,000, could be listed next year for $236,250. That is over $10,000 more just for waiting till 2019. This isn’t even bringing into question the rising APR rates for mortgages, that can increase your monthly payment amount on a home pretty significantly, as well.

I get it, the home buying process can seem pretty intimidating. But with an experienced agent on your side, it can actually go pretty smoothly. Let’s get in touch. It won’t hurt to connect you with a preferred lender and run the numbers through to see what you qualify for. The right time is always right now, I want to help you save the money you deserve to keep, by avoiding the wait.

Why Rent if You Can Buy?

Believe me, I understand renting has a very important purpose and can be the wisest choice in certain scenarios. My first year in Daphne I my family and I lived in a rental property. We were in transition from our relocation and did not yet know where we would want to purchase our home. Although it was the right decision for us at the time, I look at that year as money lost and happiness sacrificed. We rented an 1,800 square foot house that was built in the 70s, had no fenced yard for our two dogs, had no level outside area for our toddler to play, and cost us $1,200 per month. A couple months ago we purchased a brand new 2,200 square foot home that has a fenced back yard, a large lot that is level and has plenty of room for our little one to run and play, and only costs us $1,300 per month.

Home ownership rates are the lowest they have been in the last 50 years. Yet a large portion of Americans are still renting properties, instead of enjoying a home of their own. Consumer reports believe this is an issue because of a buyer’s lack of trust in their ability to purchase. It is still a long standing notion that a buyer needs 20% towards the cost of the home in order to move forward, but this isn’t true. With countless down payment assistant programs and closing cost roll-ins, a homeowner could move in with as little as a few hundred to a couple thousand dollars. Which is a huge difference in the time it takes to save up to make the move.

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Another reason to purchase in today’s market are the low interest rates available. The money saved over a mortgage’s lifespan can result in tens of thousands of dollars, if not hundreds. That’s more money in your pocket today. Don’t wait to buy when interest rates soar again. With low interest rates, that means your monthly mortgage payments are at a significantly lower cost, as well. With such a heated housing market, rental prices are soaring, and statistics are constantly showing that home ownership can be equivalent to your rental rate each month, if not less. Why remain in a small apartment or rental house if you can move into a home and pay a monthly rate that is the same? And even get a 3 bedroom house with a great backyard?

There is also a fear that a home can keep you “stuck” or “rooted” to one place without an easy transition out if you decide to move. Although the future of the housing market isn’t easily predictable from location to location, we can always discuss buying a home in an area that has a strong turn-over rate when a home hits the market. The equity build up when it comes time to sell is going to be far more beneficial than if you put money into a rental and decided to move. The money from selling the property can be used to purchase a new home. With renting, there would be no additional funds to transition into a new place.

Now imagine if you were renting a home for $2,000 per month. If your landlord is renting to make a profit, think of how much less you’d be paying on a monthly basis towards your mortgage if the home was yours. You wouldn’t be paying a landlord to profit off of you, you’d be paying a reasonable rate and would get to call the property your own.

Let’s discuss the steps you need to take towards home ownership. You might be pleasantly surprised about the type of home you can afford to move into.