Overcoming Misconceptions Regarding Buying a Home
It seems as though we are constantly seeing articles published outlining how people, especially Millennials, are in deep trouble when it comes to buying their first home. These misconceptions are keeping many people from buying a house.
You may have heard that it is very hard to save up enough money for a down payment on a home. You may have also heard that the only way to buy your first home is to have a huge down payment.
However, much of this dismay is being fueled by an array of inaccurate ideas. In this article, we’ll dive in and explore some of the key misconceptions that could be holding you back from going after the house of your dreams.
The Myth of the 20% Downpayment
One very stubborn misconception is that you absolutely, positively must put at least 20% down. Lenders realize that many people, if not most people, don’t have 20% down ready to go for a home, especially the much-coveted first home.
As a result, lenders do have all kinds of programs in place in order to help people get into homes. The main point here is to ask questions and find out what programs lenders have for you. Lenders know that there are plenty of existing new homes for sale and that means lots of potential profits to be made.
The important thing to note here is that it pays to ask questions. If you start contacting lenders and banks and asking about programs that require less than 20% down, you will not be laughed away. And it’s quite possible that one of these programs will fit your needs.
According to the National Association of Realtors, a mere 6% of first-time home buyers did in fact have the full 20% down. The bottom line is that people do get creative when buying a house, especially when it is their first home.
Myths Regarding Your Income
There are many other misconceptions that can get in your way of buying a house, such as the idea that all programs are exclusively for low-income buyers. Another misconception that often keeps people from buying a house centers on concerns over not qualifying. It seems people are concerned about their incomes being too high or too low.
While lending tightened up after the subprime mortgage crisis in the 2000’s, once again, lenders are in the business of lending money. This means you should get out there, not take anything for granted, and sit down and chat with multiple lenders about your unique situation. After all, there are plenty of new homes for sale and someone has to buy them!
Myths Regarding Mortgage Insurance
If you don’t have 20% of the purchase price to put down, it doesn’t automatically mean that you must have mortgage insurance. Additionally, there are different down payment assistance programs that can help all kinds of buyers.
Asking Questions Pays Off
It is also important to note that if you are purchasing from a builder, be sure to ask if they have a Preferred Lender. If they do, you may stand to gain financial incentives and other advantages. You will also benefit from the fact that your lender will be strongly familiar with the building project.
There are millions of homes just in the United States alone, and it is completely in the best interest of lenders that people buy those homes. Buying a house is one of those situations in life where persistence and planning can pay off in a big way, so start talking to lenders today.