Buying a home is everyone’s dream, but many people fear taking the first step, mostly because of misinformation. If you are always postponing your house buying plan, it could be because you are a victim of home buying myths and misconceptions that have made you believe owning a home is out of reach.
If you are serious about owning a home, be careful of the following myths.
1. Your credit score must be 700 and above
While it’s a fact that a credit score is crucial in determining your chances of getting your mortgage loan approved, it is not the only factor to be considered, and it isn’t a must to have a credit score of 700+. For example, if you apply for a Federal Housing Administration (FHA) insured mortgage, you can qualify even if your credit score is as low as 580, but you’ll have to make a downpayment of not less than 3.5%. If your credit score lies between 500 – 579, then you’ll have to make a down payment of 10%.
2. You must make a down payment of 20%
Down payment is what has prevented many people from owning homes. A higher down payment indeed makes your home buying easier, but you don’t have to put down 20% of the home value before you can buy it. If you have a good credit score, you can qualify for a mortgage by making a down payment as low as 3%.
3. If your application is denied, you’ve lost it
Lenders have different conditions for mortgage qualification. So, the fact that one lender has declined to offer you a loan isn’t the end of your dream to own a home. You can shop around for new lenders. You can also talk to a lender who declined your application to advise you on how to improve your chances of getting approved in the future. This can help you make the necessary adjustments before applying again in the future.
4. It’s not the right time to purchase a home
When it comes to buying a home, there’s nothing like the wrong time. Buying a home isn’t like a business investment where you expect some quick return on your investment. Buying a home is a long-term investment. Though home prices fluctuate from season to season, there are no hard-and-fast rules of determining when the interest rates will be more favorable. So, if you want to buy a home, the right time is now.
5. It’s cheaper to rent a home than to own one
Renting a home is actually cheaper than owning a home, but only in the short term. You might think that renting is cheaper if your rent is lower than the mortgage payment. But if you can calculate the amount you pay as rent for several years, you’ll notice that it will be far much higher than the total mortgage payment. Apart from that, owning a home will also give you peace of mind, boost your credit score if payments are made on time, and help you build up equity.
When you want to buy a home, talk to a reliable mortgage company to help you get the best deals. Talk to Belay Mortgage company. We’ll encourage you to buy a home and help you get a home of your dream. Do not listen to myths and lies peddled around.