Fears & Facts About Buying Your First Home

By
Real Estate Agent RES. 0769103

Buying Your 1st HomeAlthough there are many good reasons to buy a home, wealth building ranks among the top of the list.  However, too often, people talk themselves out of making one of the best financial decision of their lives for reasons that when fully examined just don't make much sense.  Listed here are the most common fears that might keep some first-time home buyers from making the transition from renter to homeowner, along with the facts that will push you past them.

Fear #1:  I can't afford to buy a home now.

Fact:  Actually, you can't afford not to buy a home now.

If you are paying rent, you can afford to buy.  From a financial point of view, in the U.S., the tax savings on mortgage interest alone usually makes up most of the difference between rent and a mortgage payment.  Also, the earlier you buy, the earlier you will benefit from equity buildup and will be well-positioned for any future appreciation

Fear #2: I should wait until the real estate market gets better.

Fact:  There is never a wrong time to buy the right home.

Historically, focusing on the market is never the smart approach to buying the right home.  Trying to time the market in the short term is the easiest way to miss your timing for the long term.  Keep in mind, it's the long term factors that make real estate a solid investment.  Mortgage rates averaged 4.45% in 2011-- an all time low since Freddie Mac started tracking in 1971 making housing affordability the most favorable on record (just 12.9% of family household income!)  All you need to do in the short run is find a good buy and make sure you have the financial ability to hold it for the long run.

Fear #3:  I don't have money for the down payment.

Fact:  There are a wide variety of down payment options available for you.

While many people believe that making a home purchase requires a substantial down payment, this is seldom true.  As a first-time buyer, options are available to you that require as little as 3.5%, and some even less.  In our area, 100% financing is still an option for homebuyers who qualify for a CHFA loan.  Don't let the lack of a large down payment prevent you from investigating your home-purchasing opportunitites.

Fear #4:  I can't buy a home because my credit isn't very good.

Erase Bad CreditFact:  A less than perfect credit score won't necessarily prevent you from buying a home.

Typically, there are two types of credit challenges-- a poor credit history or no credit history.  A poor one shouldn't prevent you from talking to several lenders to explore your options.  A good loan officer will be able to help you resolve your credit challenges.  With proper credit planning over time, you'll get on the path to home ownership. 

Another challenge is having no credit history because you are new to the workforce or have not made regular purchases on credit.  One avenue for first-time home buyers is to secure financing with the help of a co-signer, such as a parent, who is willing to stand by your ability to make the payments. 

Fear #5:  I can't afford to buy my dream home. 

Fact:  The best way to get closer to buying your dream home is to buy your first home.

Very few people can afford to buy their dream home when they buy their first home.  So you make some compromises, buy your first home, and start building equity.  This approach take you further and faster down the road to being able to own your dream home than if you hadn't purchased a home at all.

Fear #6:  I should wait to buy a home until I get married.

Fact:  There is no reason to wait.

When most people say they want to wait until they're married to buy their first home,, what they're actually struggling with are two distinct issue:  First, would it be better to wait until they had two incomes? And second, will my futufre spouse like the home I choose? 

If marriage is in your future, then getting into the game as soon as possible the right decision.  If your future spouse doesn't like the home, you can rent it or sell it and use the proceeds along with your possible dual income to buy one you both like.

Fear #7:  Buying a home seems way too complicated.Your 1st Home By the Book

Fact:  Buying a home is way too complicated, but that's why you have help.

No one would ever tell you that buying a home is easy.  It's not.  That's why there is a team of professionals ready to guide you through the home-buying process every step of the way.  From your real estate agent to your mortgage officer to the professional who handles your closing and everyone in betewen, these experts make a complex process simple for you.

It's always a great time to buy a good piece of real estate!  Contact me if you'd like to receive a free copy of Gary Keller's book, Your First Home for more great home buying tips!

 

Posted by

 

Laurie Murray Logo

Laurie Murray

Keller Williams Realty

(860) 212-8305 Mobile/Direct

www.liveingreaterhartford.com

"Serving West Hartford & Nearby Communities."

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Comments (13)

David Cole
David Cole CPA - Orlando, FL
David Cole CPA

Excellent information! This is what every renter should know about home ownership. thanks for sharing!

Feb 25, 2012 08:16 AM
Insurance Solutions
Insurance Solutions Unlimited, LLC - West Palm Beach, FL
Insurance

#7 seems to be a the objection I have heard. Complicated is just another word for "I don't understand". I like fact # 2 there is never a wrong time to buy.....

Feb 25, 2012 08:21 AM
Laurie Murray
West Hartford, CT
Serving West Hartford & Surrounding Communities

Thanks, Dave. I can't remember a better time to be a buyer!

Feb 25, 2012 08:24 AM
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Laurie - Thank you for sharing detailed quality information on fears facts about buying your first home.

Feb 25, 2012 11:50 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Laurie, very good points for over coming buyers fears of home ownership. Good information!

Feb 25, 2012 06:02 PM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Good points.  I've never seen a more affordable time to buy homes than now.  We have every indication that the market is changing also.

Feb 25, 2012 07:49 PM
Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

Good information here.  I've never been a fan of "You can't afford NOT to buy a home right now" approach, but i hope it's working for you.  

Feb 25, 2012 10:36 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Considerations of any sort abound when it comes to living life and navigating as we go. You weigh things out, and then....tally ho. Buying Real Estate requires the assistance of an agent and is not something you will ever regret...quite the opposite. good post and thank you Laurie

Feb 25, 2012 11:46 PM
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Laurie:

All good reasons to buy a home and buy it now.  Fear #5 seems to be the one I hear most from buyers.

Feb 26, 2012 06:29 AM
Vanessa Saunders
Global Property Systems Real Estate - White Plains, NY
From Manhattan to the Catskills of New York

The "...too complicated," part of your excellent post is a constant challenge!

Feb 26, 2012 06:40 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Laurie - First time buyers more than anybody need help working through the process and understanding the difference between fact and fears, and I think you've hit some of the major ones.

Feb 26, 2012 10:23 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

When the real estate market gets "better" . . . that means pricing will stablize and go back to normal appreciation rates.  Buyers do not want the market to get better, because when it does, they'll be paying more!!  Nice feature Laurie.

Feb 26, 2012 11:06 AM

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