Home Buying Myths – Debunked

Home Buying Facts vs MythsDo you believe home purchase is out of your reach?  Do you feel overwhelmed just thinking about it?  Don’t let these home buying myths overwhelm you.  They’re not even true!

Let’s demystify some of the most common myths about purchasing.

Myth #1:  My Credit Score Isn’t Perfect

Fact:  As of February 2019, the average credit score for APPROVED FHA loans was 675. The average credit score for APPROVED Conventional loans was 751.

Credit score is just one of several factors that determine loan eligibility.  Your Mortgage Lender will pull a credit report and review it with you.  Don’t be afraid of judgement from these professionals.  Your lender has seen it all, and their ultimate goal is to help you accomplish your home purchase.  Whether they have a program that works for you now, or they counsel you on what steps to take in order to qualify in the future, you will know what your options are.

Myth #2:  I Need 15%-20% Down Payment

Fact:  The average down payment for first-time homebuyers is only 6%!

If you need help with down payment, there are some options ranging from gifts from family members to assistance programs.  Your Mortgage Lender can help to determine which options are available to you.

Myth #3:  It’s Cheaper to Rent than Own

There may be some truth to this in the short term, but if you plan on renting for a couple of years or more, it is in your best interest to consider a home purchase.

Fact:  Mortgage payments are stable (when you choose a fixed rate loan) while rent continues to rise annually.

According to a rent.com survey:

  • 88% of property managers raised their rent in the last 12 months
  • 53% said that they were more likely to bring in a new tenant at a higher rate than renegotiate and renew a lease with a current tenant that they already know

Myth #4:  Renters Don’t Pay Property Taxes

Fact:  All expenses, such as property taxes, property insurance and maintenance are factored into rent, so renters are paying it indirectly.  When you purchase a home, if you have a mortgage payment, your payment is generally divided up between:

  1. Principle
  2. Interest
  3. Property Taxes
  4. Mortgage Insurance (if you put less than 20% down)
  5. Property Insurance

Have more questions about home buying or next steps?  Please feel free to reach out.  I’m in the neighborhood and I’m here to help!