Top Home Buying Myths: Setting the Record Straight
It’s very important that you’re well informed of what is fact and what is fiction.
Whether you’re a real estate professional or first-time home buyer, the home buying process and real estate transactions can be stressful. There tends to be some common misconceptions in this process, so it’s very important that you’re well informed of what is fact and what is fiction. We’re here to dispel the home buying myths that could impact your decisions.
Myth #1: You don’t need a REALTOR®.
Before you bravely take on one of the biggest purchases or sales of your life, remember this: it’s not as easy as it looks. REALTORS® know all the ins and outs of the local area as well as the market in which you’re looking to buy or sell. Picking up the phone and calling a REALTOR® may be one of the best decisions you’ll make.
Consider interviewing an Exclusive Buyer’s Agent, as well as, one of the buyer’s agents working for a listing company. You may risk a conflict of interest in the latter situation.
Myth #2: The bigger the downpayment, the better off you’ll be.
Buyers’ immediate reflex is to put as much cash down as they can when buying a new home because they’ll borrow less, lower the monthly mortgage payments, and won’t need to buy mortgage insurance. However, putting 20% down is not a requirement and it’s not for everyone.
Thanks to Federal Housing Administration Loans (FHA Loans), you can put as little as 3.5% down. With this method, you’ll potentially have a lower interest rate, giving you more flexibility. Your money is not all tied up in your house like in a traditional down payment that can leave you with little or no extra cash to spend on home care, improvements, or any other unforeseen circumstances.
Talking with a lender very early in the home buying process will help you to fully understand what the best avenue is for you. There are many loan programs out there and it is important that you learn about what is best for you.
Myth #3: Appraisers set the value of a home.
The role of the appraiser is to produce a credible opinion of value that reflects the current market. Appraisers are not responsible for setting the value of the home and they also do not confirm a home’s sale price. According to David S. Bunton, President of The Appraisal Foundation, “Appraisers provide an analysis of the collateral, so that lenders understand the value of a property when making the loan decision.”
Myth #4: You need perfect credit.
Most people assume that you must have absolutely golden credit in order to get a loan, but that just simply isn’t the case. If buyers have less than perfect credit, lenders are often willing to work with them to get the best possible loan.
Credit is not the only thing that lenders look at when deciding to approve a loan, but your score will have an effect on the interest rate on your mortgage. Make sure you review your credit report and if any errors are found, they should be reported to the credit reporting bureaus before applying for a mortgage.
When you have selected a lender, pulling your credit report is one of the things they will do for you. They will review it and help with any problems that may show up on the report. They will advise you about your credit score and make an otherwise confusing process go as easy as possible. The lender and your Realtor will work together to help you begin the home buying process and make it go as smoothly as possible.
FOR HomeBUYERS, Inc., as an Exclusive Buyer’s Agency, will also be looking out for your best interest 100% throughout the buying process. Contact us today to learn more about Exclusive Buyer Representation.