3 real estate myths First Time Home Buyers should avoid
When it comes to buying or selling a home, I do understand your friends and family may offer to help, by providing you with information. I really do. However, please keep in mind they may not have all the answers. Working with a Trusted Real Estate Professional, can help to dispel all or some real estate myths that may have prevented you for taking the necessary steps to becoming a homeowner. Here are a few you should try to avoid:
High Credit Score is Required
The first is regarding your credit. Recently I had a prospective home buyer called to find out what he needed to do once his credit scores reach 800. His friend told him that his credit scores needed to be 800 before he could try to buy a house. While I did let him know that I admire the work he is doing on his credit, I also let him know that his middle score did not need to be 800 to qualify for a mortgage.
Having an 800 middle score would be great, but it is not required to qualify for a mortgage. With down payment of 3.5%, you can get an FHA mortgage with a middle credit score of 580. In addition, you can also qualify for a FHA mortgage loan with a middle score that is lower than 580, however, a 10% down payment will be required.
Waiting For The Perfect Market to Buy - Otherwise Known as Timing the Market
Is there every really the perfect time to buy? Why wait for interest rate to drop when you can buy your home and refinance when rates drop instead. Why wait for home prices to drop? Remember, a house is an appreciating asset, so you should want prices to increase.
If you decide to wait until interest rate fall, or until home prices are low enough, what if the market condition you are waiting for does come, but it does not impact the neighborhood, location or home you are considering? What will you do then?.
In life there is always something. Economic condition are what they are. Work with a trusted realtor to help guide your real estate goal, so you do not over pay for the home. And make sure your mortgage payment is within tolerance so you dont stress about making the payments.
20% Down Payment Required
A lot of people falsely believe that a down payment of 20% or more is require to purchase a home. The reality is, while some home buyers do put 20% or more down, you do not have to. You can get mortgage loans with down payment as little as 3%. There are also mortgage loans that does not require any down payment at all, like USDA and VA.
FHA down payment is only 3.5%. Also, the conventional 97 loan program allows qualifying borrowers to get a conventional mortgage loan with as little as 3% down. For Jumbo loan, a 10% down payment is usually required, however some lenders are likely to require more.
Please do not let any of the above prevent you from moving forward with your home buying plans. There will most likely never be the perfect market for both home buyers and home sellers at the same time. There is a bevy of lenders available to help you with your mortgage needs.
Please let me know if you need a referral. Now that you know that a 20% down payment is not necessary, keep in mind there are also down payment assistance programs available to help you attain your real estate goal. See you at the closing table. As always thank you for stopping by. Until next time...Diana
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