The homebuying process is a major milestone, but once you reach it, a few questions may pop up. With so many myths and misconceptions floating around, it’s important to make sure you get the truth so you can make the experience as rewarding as it should be.
It’s time to set the record straight. We’re here to bust these homebuying myths and give you the facts so you can have peace of mind while you find your new home.
Myth 1: Renting Is Always Cheaper Than Buying
There’s a common misconception that renting is more affordable than buying a home. While this may be true in the short term, it’s important to remember the big picture.
When you rent, you're essentially paying your landlord's mortgage, with no return on investment. On the other hand, buying a home has many long-term financial benefits. The equity you build from your payments could become a significant asset, and the potential for your property value to appreciate may make buying a home a wise financial decision.
There are also several tax benefits that may come with owning a home, such as deductions on mortgage interest and property taxes. When you factor in the stability of a fixed-rate mortgage, it’s easy to see why owning can be more affordable than renting.
Myth 2: You Need a 20% Down Payment to Buy a Home
One of the most popular myths is also one of the most incorrect. While a down payment of 20% or more can reduce your mortgage payments, it’s far from a requirement when buying a home. In fact, there are many types of loan programs available that allow buyers to put down as little as 3%.
If you have the income and creditworthiness to buy a home, don’t let this myth scare you away. Even if you’re still working on getting your savings to a comfortable place, more likely than not, there are options that could make homeownership a reality for you.
Myth 3: Your Credit Score Needs To Be Perfect
Speaking of credit, here’s another myth to bust. While having a high credit score can certainly help you secure a favorable mortgage rate, the idea that you need a “perfect” credit score to buy a home is simply false.
Lenders consider a range of credit scores when approving mortgage applications, and many have options specifically designed for those with less-than-perfect credit. For example, FHA (Federal Housing Administration) loans are popular among first-time homebuyers because they require lower credit scores and smaller down payments. While choosing a loan like this may require you to have mortgage insurance, the bottom line is that lenders are a lot more flexible with things like credit scores than you’d expect.
Myth 4: The Only Upfront Cost Is the Down Payment
The down payment is the most talked-about cost when purchasing a home, but it’s not the only one.
Closing costs are an assortment of fees and expenses that come with finalizing your home purchase, and they can range from 2% to 5% of the purchase price. Think of them as the last thing you need to pay before you can turn your homeownership goals into reality. These costs can include things like lender’s fees, homeowners’ association dues and other regional fees.
While closing costs can add up, they don’t have to break the bank, and there are even ways to reduce them. When you purchase a home through the Starlight Advantage Program, we'll contribute a fixed amount of dollars toward your closing costs, subject to regulatory limitations based on your loan program.
Myth 5: It’s Not a Good Time To Buy a Home
The idea that there's a "perfect" time to buy a home is another common myth. While market conditions, interest rates and housing inventory can fluctuate, the best time to buy a home largely depends on your personal circumstances.
It’s nearly impossible to try to time the market, and waiting for that “perfect” time can result in missed opportunities, such as losing out on a house that you love. That’s why factors like your financial stability and long-term goals should be weighed more than market conditions.
Hear Any Other Myths Lately?
Our Home Guides are ready to bust those, too. Get in touch to schedule an appointment and start your journey toward homeownership today.
