It's easy to get lost in a sea of misinformation when it comes to buying a home.
Sometimes the information you find or hear is outdated. Sometimes it doesn't apply to your situation. And sometimes it's just wrong.
Having accurate information is key to successfully buying a home so keep in mind these 4 common home buying myths to help understand what you need to know.
MYTH: You need a large down payment (10-20%) to buy a home.
REALITY: In fact there are numerous programs with 0-5% down payment options.
MYTH: You need perfect credit to buy a home.
REALITY: Your credit may not be spotless, but that doesn’t mean you can’t buy a home. Keep in mind that the higher your credit score, the lower your rate may be.
MYTH: Your down payment is your only expense.
REALITY: While the down payment is usually the largest upfront expense to buying a home, it isn’t the only one that you need to take into account. There are also closing costs to consider. These fees account for all the charges necessary to facilitate the transaction. They usually add up to 1% – 2% of the sale price.
MYTH: Getting prequalified is the same as getting preapproved.
REALITY: You can get prequalified in minutes just by answering a few questions about your financial situation. However, the preapproval process is much more thorough. Preapproved means your loan & supporting documentation are reviewed by the lender and you’re given a maximum amount for which you can qualify.