There may be more upfront costs with owning a home, but all that money is an investment.
Buying a home can be one of the most important investments you’ll ever make. Homeownership is a great accomplishment – something to be proud of. Unfortunately, misinformation can spread like wildfire and cause unnecessary doubt and fear, especially for first-time homebuyers. Here are five common myths and why you shouldn’t buy into them.
Myth #1: Renting is Cheaper than Buying
Renting may seem like the better option at first glance, but when you look at the bigger picture, owning is the clear winner. There may be more upfront costs with owning a home, but all that money is an investment. With renting, you’re giving the money to someone else, and you’ll never see it again. There are, of course, benefits to both, but if you’re looking to stay in the area long-term, buying is the way to go.
Myth #2: You Need to Put 20% Down
This is simply untrue. A 20% down payment on a home is a huge investment – one that many can’t even fathom. This leads people to believe they have to save for years and years before they can even begin to think about owning a home. The truth is, there are plenty of loan programs that will allow for a much lower down payment, with some not even requiring one at all.
Myth #3: You Need a Perfect Credit Score
Of course, a perfect credit score is not a bad thing. However, the notion that you need a perfect score to own a home is false. The common credit score for most loan programs is around 620 for homebuyers, with some lenders offering loan programs with lower credit requirements.
Myth #4: You Cannot Have Any Debt
With the rise in student loan debt in recent years, amongst other debt, homebuyers often fear they won’t qualify for a loan. However, lenders don’t look at the specific amount you owe. Instead, they’ll look at your DTI (debt-to-income) ratio, which is the percentage of your monthly gross income that you are able to put toward that debt. As long as you’re able to make those monthly payments, you’re right on track.
Myth #5: All Lenders are the Same
Of course, different lenders may offer you different rates, but that’s not the only thing you should keep an eye out for when considering your lender options. You want to find a lender that has your best interests in mind – a lender who listens to your financial goals and helps you find the mortgage that best aligns with them. QCBN
By Greg Riordan
Greg Riordan is a loan officer with Legacy Mutual Mortgage. For additional information or to get in touch with Greg, visit www.GregRiordan.com or call 928-427-5156. You may find his office at 325 W Gurley St #102, Prescott, AZ 86301. Greg cares about the people that choose to trust him with the biggest asset in their lives – their home. He will give straight, honest answers with exceptional advice whether you are refinancing your home to pay off debt, lowering your rate, reducing the length of your loan or looking to purchase your first or next dream home. Greg Riordan, NMLS # 832841 | Gardner Financial Services, LTD., dba Legacy Mutual Mortgage, NMLS #278675, an Equal Housing Lender.
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