4 Myths For First Time Home Buyers - There are plenty of myths out there about buying a home. For a first time home buyer, it can be confusing to separate fact from fiction. We’ve gathered our top tips to help home buyers through the experience.
1. You must have a 20% down payment - Buyers are encouraged to put down 20% or more on their home to avoid paying private mortgage insurance. However, there are loans available that require a much lower down payment, some even as low as 3.5%.
2. Renting is less expensive - While the current trend of renting is popular among young adults, it is not always the cost effective route. Through buying a home, your monthly principal and interest payments will remain the same throughout your fixed-rate mortgage, while building equity in your home, which can help financially.
3. The only upfront cost is the down payment - The costs don’t end with the down payment. There’s closing costs and also any potential updates and repairs associated with buying a home. It’s key to save up to 6 months worth of emergency money to cover potential expenses.
4. A 30-year fixed mortgage rate is the smartest deal - While this might be true for some, if you’re only planning on living in your house for 5-7 years, a fixed rate of 7 years would be more suitable.
By keeping these tips in mind, your home buying experience is sure to be a success! What do you think of these myths? Do you have any tips to share? Comment to share with us!