Featured News 2016 2 Home-Buying Myths Debunked!

2 Home-Buying Myths Debunked!

You've been a renter long enough and now you're ready to invest in your own piece of real estate – congratulations! During this exciting time, don't be surprised if you start getting advice from well-meaning friends, family, and co-workers. When you buy your first home, it seems like everybody has something to say.

But be careful of people's advice. Your friend who bought a home 2,000 miles away in a very different housing market or your uncle who bought his home 30 years ago may not have the most "applicable" advice. You could unintentionally take bad advice without realizing it until it's too late.

Since you're likely to run into some "questionable" information, we're going to debunk some common misconceptions about buying a home.

Myth No. 1: First, you find a house.

Once you decide to buy a home, your first instinct may be to go out and start hitting the open houses. House shopping can be an exhausting process. You could spend dozens of hours on the Internet browsing homes on realtor websites and countless more driving around looking at houses.

Often, people will fall in love with homes they can't afford. They get their heart set on a house and then realize it's more than they qualify for. Before you start looking at houses, you need to make sure your credit is in tip-top shape, then you need to get pre-qualified for a mortgage. This way, you know what you can actually afford.

Myth No. 2: You have to put 20% down.

While it's certainly ideal to put 20% down on the home of your dreams, many lenders will approve home loans with 5% to 10% down, however, the borrower will have to pay the private mortgage insurance (PMI).

For those who qualify, another alternative to the conventional loan is a Federal Housing Administration (FDA) loan, which is not only backed by the government, but only requires 3.5% down.

We are only scratching the surface when it comes to common home-buying myths. If you are about to make one of the biggest investments of your life, we recommend consulting with an experienced real estate attorney for reliable advice.

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