Over the years, some very common misconceptions about buying a house have become common. But dig deeper and you’ll see that these common-held beliefs are more myth than reality.
Myth 1 – You need 20% down payment The biggest myth I have to dispel with clients is that homebuyers must have a 20% down payment. Even with unlimited access to home buying information, people still are holding this out as the gold standard for buying a home. There are many different loan products that don’t call for 20% down.
It doesn’t matter if you’re a first-time homebuyer or you’re buying for the 10th time. You. Do. Not. Need. To. Put. 20% down.
Now if you want to, cool. It could mean you don’t have to pay private mortgage insurance (PMI). But depending on how you look at it and considering how long it may take to save up that amount, it might not even be the best use of your money.
Myth 2 – Your planned use of a home doesn’t matter Do some of these get-rich-quick lines sound familiar? 👉 Buy an investment home with no money down. 👉 Buy a fourplex and eliminate your mortgage payments without even living there. 👉 Buy multiple primary homes in a year and get a fat investment portfolio.
Want to guess what a lot of the real estate “hacks” you see on social media have in common? Two words. Mortgage fraud.
Don’t get me wrong, there are some really cool ways to build wealth through real estate. I’ve helped thousands of clients not only find that dream home but invest in vacation homes, rental properties and more. The use of the property does matter. And your choice of mortgage lenders should matter, too.
Please make sure you’re getting your info from a licensed professional because if you commit fraud using one of these clickbait strategies, you’re the one who will pay the price.
Myth 3 – Gotta use your bank, right? All too often homebuyers go with what they think is the “safe” choice. After all, they have a checking and savings account at their local hometown bank so that’s gotta be the place to get a home loan, right? Well, not necessarily. How many home loans does that bank do each year? Do they have several different loan options? Since buying a home is likely the largest transaction you’ll ever make, it pays to work with someone who specializes in mortgages.
As long as the rates are reasonable, it is OK to work with an individual loan officer regardless of the lender they work for over loyalty to a certain bank or company.
But how can you know whom to trust?
Check Google reviews, ask other friends and family for recommendations. Your real estate agent can recommend someone or you might find someone really helpful on social media who blogs and vlogs about mortgages regularly. (😉😉)
Be like so many clients, follow me on social. Learn a lot. And work with me when you’re ready.