First time home buyers are often intimidated by the home buying process, due largely to myths they have heard from others. Proper education is essential especially today when there are so many options and choices to make as a first time buyer.
There are first time buyers who are even afraid to begin the process because of what they have heard from a friend of a friend or read somewhere. Below are the top 5 dangerous (if you believe them) myths that we will eliminate today.
#1 I can’t afford a down payment
Many first time home buyers think that they are required to put up a 20% down payment, but no. In fact, 7 out 10 first-time home buyers make a down payment of 5% or less and some first time buyer programs offer NO MONEY DOWN! (certain restrictions apply). This is definitely a home buying myth!
#2 I can’t get a mortgage because I have less than perfect credit
Your credit is very important, that’s for sure. Good credit is useful, because it gives you “buying power.” But, more importantly, good credit shows your “integrity” and “creditworthiness”. Even if you have had credit challenges (due to no fault of your own) you can still operate in integrity by co-operating with your creditors.A less-than perfect credit history does not have to stand in your way of reaching your goals of owning a home. There are mortgage companies and products that have helped thousands of individuals move beyond credit challenges into homes of their own. This is something that many first time buyers are not even aware of, but should be!
With changing times in the credit market, it’s important that you get your scores up as high as possible to ensure better chances for loan approval. If you need help, please work with a legitimate, non-profit organization or program dedicated to helping individuals develop discipline to live within their means and pay their bills on time.
If you have credit challenges, commit to the process of raising your scores. Be pro-active. Contrary to what some may tell you, it really doesn’t take very long to see increases in your credit scores if you are handling your credit responsibly. But do be aware that there are no quick credit fixes. Stay away from thoseadvertisements that claim to clean up your credit and give you a spotless score.
There is a light at the end of the tunnel, You can do it! Don’t give up…slow and steady wins the race!
#3 It’s cheaper to rent
With today’s low rates, there’s a good chance that your monthly payments will be lower than they are right now. And unlike rental costs, your monthly principal and interest payments will stay the same for the life of a fixed-rate mortgage. Moreover, as a homeowner, you’ll be building equity in your home, which is wealth that you can use to achieve your financial goals! This is something that as a first time buyer may not see out of the gates, but it is a very important factor nonetheless.
#4 The loan process is long and complicated
Now, more than ever, it the home buying process has become very seamless. Your mortgage consultant will help you through each step of the financing process, so you’ll NEVER have to go it alone. There are a lot of things to consider, don’t get me wrong. But this is why it is very important to select the right people to surround yourself with, in what is likely your largest single financial obligation.
Here’s a tip. The key to having an expeditious loan process and approval is to be ORGANIZED with your DOCUMENTS! Start keeping all of your documents in a separate folder (i.e. pay stubs, tax returns, lease agreements, etc). This ALWAYS helps to speed up the process. We provide our clients with a checklist of all the items we will need from you to show the lender. When your lender asks for them, we will have them handy versus having to wait at the mercy of someone else to give you a copy.
Remember, organization is the key. Get organized, then stay organized!
#5 I won’t be able to make my monthly payments
With a mortgage loan that fits your budget and your financial goals, your home will be a POWERFUL tool in building a secure future for you and your family. If you are paying your rent on time each month…why wouldn’t you do the same with your mortgage payment? You will!
As a first time home buyer, you have to be responsible and take control of your situation. Don’t allow these “adopted” myths to become a part of your thinking. True, that some people may have issues with one or two of these above scenarios but NOT you! Interpreting these home buying myths as truth will paralyze your pursuit of home ownership.
Public Enemy said it best…..Don’t believe the HYPE
I’ll leave you with a piece of advice that really rung true for me. The key to success is to keep moving forward and paying less attention to the noise, and more to your path and your actions.
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