5 Misconceptions of Buying a Home

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February 14, 2018 by realestateresource

 

There are many questions in the minds of buyers associated with home buying. While there is lot of information and advice available on internet, there are also misconceptions that make the process of buying difficult for these buyers.

1. I need a lot of money to buy a home

The banking term “down payment” has become a household term among home buyers. Most of these buyers have purchased cars or other electronic items on installments where they have had to put forward down payment. This leads them into believing that they need lots of money to be able to buy a home. One figure that is common in the minds of these buyers is 20% down payment. The truth is that you can buy a home with as little as 3.5% down payment.

2. I can buy a home if I have saved the money for down payment

Down payment only covers the requirement of the lender who finances the rest of the money for the purchase of the house. There are many other associated costs of buying that include mortgage insurance, application fee, appraisal fee, attorney fee, inspection fee, and closing costs that you have to bear to be able to buy the home.

3. I need to have very high credit score

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It is true that loan officers pull out your credit report when deciding on your mortgage application. It is also true that your chances of obtaining a lower rate of mortgage increase when you have an excellent credit score. But this does not mean you cannot secure a mortgage with an average or even poor credit score.

4. I must finalize a home before approaching a bank

This is a misconception that most first time homebuyers have. They spend time and effort searching for the right home even before they contact a lender for a mortgage. The right approach is to know your financing options before conducting your house hunt. Having a prequalification letter in your hand makes it much easier to search the right home for your family.

5. Having a realtor is not important

Many buyers think they can save money by not using the services of a realtor. The truth is that the fee of the buyer’s agent is paid by the seller of the property. A realtor can make home buying a smooth and hassle free exercise for you through theirexperience and skills.

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