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6 Myths About Buying Your First Home
The thought of buying your first home can be overwhelming, especially since there are many common misconceptions about what it takes to be a qualified buyer. Let’s break down those myths:
You need a big down payment.
Many people continue throwing away their money by renting because they think they don’t have enough money to buy a home. The reality is that there are numerous programs for first-time homebuyers that make it possible for you to buy a home with a small down payment. There are even a few $0 down payment options.
Your credit report must be spotless.
Of course you need to have a good credit history demonstrating that you pay bills on time and aren’t carrying a ton of debt, but nobody is perfect. Not only is a good credit history important to
a mortgage, it’s also important for your overall financial health.
You need to be making a ton of money.
Depending on your income—and where you’re at in your career—you may be able to afford a starter home or a fixer-upper. This makes it possible for you to build equity in a home, rather than putting money into your landlord’s pocket every month. Something else to consider is your chosen career. Since physicians, dentists and other high-earning professionals start out with moderate incomes, we have financing options designed to recognize the accomplishment of completing medical school training, as well as the future income you’ll earn.
Property taxes are ridiculously expensive.
It’s smart to be thinking about the other costs that go along with the mortgage itself! It’s true that property taxes can be high (depending on where you live), but they may not be out of reach. Property listings typically include the previous year’s taxes, which will give you an idea of what to expect.
You’ll also need to consider the cost of homeowners insurance, which is required when taking on a mortgage to make sure you can afford the homes you’re looking at. With the recent passage of the Tax Cuts and Jobs Act, you’ll want to consult with a tax professional to determine what impact the new law will have on your ability to deduct property taxes and mortgage interest.
The first step is to go to a bunch of open houses.
While this seems like a logical place to start, it’s wise to start by determining how much home (including property taxes, insurance and maintenance) you can afford.
Mortgage providers like Stearns can help you get pre-qualified (which is a softer step than a firm pre-approval), so that you’ll know what price range you should be looking at. Otherwise, you could fall in love with a home you can’t afford. This can lead to taking on a bigger mortgage than you should or getting so discouraged that you give up.
Buying a home is difficult and confusing.
The reality is that buying a home can be complicated … but it doesn’t have to be. We’re passionate about educating potential homebuyers on the process of choosing a home loan that’s right for them. Check out other articles on our blog or call one of our local Mortgage Loan Originators today. We can help you!
- By Stephanie Clark , Mar 19, 2018
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