Are you considering purchasing a Westfield home in the new year? Do you think you need to put 20% down in order to qualify? That is absolutely not the case. Some programs allow you to purchase a property with as little as 3.5% down (or less). But that is just one of several home buying myths that stops people from buying a new home. What are the others?
Home Buying Myths You Should Just Ignore
Student loan debt lands among the top reasons why undergrads delay purchasing a property. Even if you paid off your student loan, thousands of people believe they must pay off all of their debt before they could qualify for a home loan. Not true. While extensive debt might hurt your chances of loan approval, lenders like to see that you manage your debt properly. So, a debt load of 36% or less puts you in a sweet spot with lenders.
Unless you buy a Westfield home with cash, you need a decent FICO score to qualify for a home loan. But another one of the home buying myths to ignore is the need for an excellent credit score. An 800 score might land you the very best interest rates, but some buyers qualify with scores in the low 600s. Some programs even allow credit scores below 600. But you will most likely end up paying a much higher interest rate for those. First, get your credit into the best shape possible. Then, talk to your lender about which program fits your needs.
You Can Only Use a 30-Year Conventional Loan
Another one of the home buying myths to ignore is that a 30-year conventional loan is the only way to go. Nothing could be farther from the truth. Approximately three-quarters of home buyers today utilize FHA loans. The 30-year fixed-rate FHA loan locks you into one interest rate for the life of your loan. If you can afford a higher monthly payment, you might want to consider a 15 or 20-year fixed-rate loan. Other loans include a VA loan (zero down for active and retired military), USDA loans (rural properties), or a jumbo loan (for loans over $822,375 in 2021).
Established in Your Career
Long-time employment with the same company is not a necessity before you qualify for a home loan either. Lenders like to see steady employment with a decent salary (among other things). That could mean as little as a couple of years in your industry. Transferring from one company to another but staying in the same position should not work against you.
Primary Residences Only
Finally, another one of the home buying myths you should ignore is that you only buy a Westfield home that you intend to use as your primary residence. Some buyers that can afford it choose to rent a place near their work and purchase a property as an investment instead. AirBnB, vrbo, and even just as a long-term rental might provide a better investment than a primary residence. Discuss your options with your tax consultant and/or lender before determining which route to take.
Gingerbread House Contest
If you have not cast your vote in the Westfield Gingerbread House Contest, you need to hurry. Online voting closes this Thursday, December 31st, 2020. Visit the City's website here to cast your vote for the Iconic Westfield Building, Westfield 300, Under 12 Kids Only, and Best in Show categories. Officials announce the winner on Friday, January 1st.
Originally posted on my luxury Westfield area real estate here: https://www.luxuryhomesnj.com/westfield-buyer-tips/home-buying-myths-to-ignore/.