5 Misconceptions About Buying A Home
Many people believe that buying home is out of reach, as it would take years to save the recommended 20% for the down payment. However, requirements vary based on the loan type and home buyers purchasing a primary residence will always have a lower down payment requirement than an investor or second home buyer.
It’s a challenging market for home buyers in many areas of the country. Demand is high and housing supply is generally low. With so much competition, some buyers are opting to wave a home inspection to make their offer more attractive to sellers. However, waiving the inspection isn’t in your best interest. Getting an inspection provides the buyer an “out” as it reveals critical information about the condition of a the home and its systems. It can tell you if there are any costly repairs or maintenance the home may require. It can detect safety issues like radon, carbon monoxide, and mold. It can reveal illegal additions or installations. It is your responsibility to understand as many details as you can about a property you may soon call home.
Contrary to what some people say, a home is an asset. While it may be scary to have a mortgage debt of $200,000, you now have an asset worth close to the same amount. Owning a home has the potential to grow wealth over the long-term. While the interest you pay on a mortgage is significant, historical returns on real estate over the long-term can still put you way ahead. Debt that you can write off on your taxes and has an interest rate below 6 percent can also be considered good debt. You can also tap into the equity that you build in a home over time with home equity lines of credit or home equity loans. You can then use these loans to help fund home improvements, pay part of your children’s college educations or pay off higher-interest-rate credit-card debt.
While you don't need a perfect credit score to get the best mortgage rates, there are general credit score requirements you will need to meet in order to take out a mortgage. Prospective home buyers should aim to have credit scores of 760 or greater to qualify for the best interest rates on mortgages.
If you're wondering whether it's a good time to buy a house, ask this instead: Is it a good time in my life to buy a house? Mortgage rates are at historic lows these days, which makes buying a home more affordable than when rates are higher.
Kimmy Ostrom, Realtor
Keller Williams Hometown Partners, LLC
(316) 665-6477
