Many times, so many of us think things are common knowledge, but instead they are just a mere misrepresentation of the truth. Like when we were little and grandma would tell us that if you keep crossing your eyes like that they will get stuck. However, as we get old and wiser we realize this not to be true. This could be the same for a lot of things we hear through the grapevine about buying a home, just because someone says it to be true doesn’t always make it so. Here is a little breakdown of a few of those home buying myths that we have either heard from a friend of a friend, or those close to you that might not be an expert.
Prequalified Means an Automatic Loan: One of the first few steps to purchasing a new home is getting prequalified from a bank, as this point you have given them a brief description of your income, debt, and finances. Once you decide on a home, the heavy lifting takes place. There is a list of documents they will need to look closer into regarding the money side of things. Than there are several things such as the appraisal and inspection that could throw things off course. Being prepared and organized will help make the whole process go so much smoother.
Your Accepted Offer Is Set in Stone: You have found a home, put in an offer, and the seller has accepted your offer. Congratulations, but it’s not set in stone yet. Once the inspection happens, there may be house related issues. You may be able to trim off hundreds or even thousands from the price to take care it, or include these things getting fixed before the closing.
Skip the Buyer’s Agent and Go Straight to the Internet: This is something that has become popular in the last several years, but may not be the best way to go. Though this may be an option for few, going with a real estate agent is usually the better option. They do more than just show you homes, they also give you a lot of important information as well as guidance through the negations. Like having a loan officer to help you with getting the mortgage, it’s better to have an agent to help with the buying process.
Start Looking for Homes in the Spring: Yes, buying and selling a home in the spring is the most opportune time for many people. Weather plays a big part in this. Fall and winter may also be a great time to house hunt, since there is less traffic so you may have more bargaining power; this in turn will save you money.
A House Inspection Is Optional: I know with your big purchase that you are looking for ways to cut cost, but this is one mistake that could cost you hundreds or thousands in the long run. This is a vital part to purchasing a new home. Don’t rush this. If you do, this could leave you with a laundry list of things wrong with your new home and you footing the bill.
Buy the Worst House in the Best Neighborhood: There are certain circumstances that this could work, but a few questions to ask yourself are: how long can you live with a renovation, is the cost worth it to make it livable, and are the things that make it the worst major, like being next to a loud business or a busy road. So, weigh out your options and decide if the it’s worth it in the long haul.
Choose Only a 30-Year Fixed Mortgage: With the trend of buying a house with Millennials starting to increase, the trend of 30-year mortgages is decreasing. I’m sure your parents had one, and may have lived in it long enough to pay it off. Just keep in mind that there are other options that might better your investment. You could end up paying more for your 30-year mortgage than you would for a 15-year mortgage, borrowing the same amount of money but taking twice as long to pay it off. There is no right or wrong answer here, just keep an open mind.
Always Make a 20 Percent Down Payment: Obviously the more you put down the better off you will be, but this doesn’t mean it’s your only option. To avoid having you pay a private mortgage insurance, yes, the 20% down would be your only route. If you qualify, there are government loans that can go as low as 3.5% down, or programs that can assist with the down payment.
Buyers Without Kids Don’t Need to Pay Attention to the Schools: The biggest thing to think about here is not whether you want to have kids someday, but If you plan to sell your house in the future. Homes in neighborhoods with a well sought-after school district can get a premium payout when selling. So, a little research will pay off big!
The only upfront cost is your down payment: Inspection, insurance, appraisal, taxes, and several other fees are just the beginning of the upfront cost of buying a home. Closing costs alone can range from 3%-6% of the purchase price. Having an extra chunk saved up will help you in overall process, ensuring you’re not stuck at the end.
The ones that have the best home buying experience are the ones that go into it being prepared and organized, as well as a clear understanding of what you are comfortable with. Working with peoples that are experience and educated and can help separate myth from truth, and can make buying a new home a lot smoother. If you think this is you give, us a call at (802) 863-2020 or visit us on our website to start the application process. We look forward to hearing from you!
Warm greetings from all of us here at the Vermont Mortgage Company! We know we talk a lot about mortgages and their different types, but what exactly are the benefits of a mortgage? Amazingly enough, it's more than just a way to pay for a house over a period. There...