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- need a 20% down payment. Nope, not at all. There are several loan products available that offer low down payment options. 3% down is the lowest that I’ve personally seen, although 3.5% down payment (FHA loans) are more common. Depending upon several factors (profession,income, household size etc….) you may qualify for some sort of down payment assistance. You should definitely contact a Realtor if you are interested in going that route.
- I can get a better deal if I buy without an agent. In most real estate transactions the services provided by the buyers agent is FREE (you heard right) to you, the home buyer. A buyers agent is paid by the seller. You may be making a crucial mistake if you choose to buy without representation. The price of the home is not reduced if you choose to work with the listing agent directly. So why would you not want an expert to walk you through and advise you during the process. There are several “irons in the fire” so to speak during the home buying process and you truly need a qualified professional to help you make one of the biggest financial decisions of your life. Be wise. Hire an agent and stick with that agent.
- My credit score is not high enough. Although the higher your score, the better your interest rate will be a 700 + credit score is not needed to be approved for a home loan. A score of 640 score is ideal, and depending upon your debt to income ratio, you may be able to qualify for a loan with a score of 580.
- I can’t afford a mortgage payment – This one is not all inclusive, however, if you are paying rent, you can probably afford to pay a mortgage payment. In fact, you already are paying a mortgage- It’s just not yours.
- It’s costs the same as renting. Not necessarily. You may or may not be able to secure a mortgage, in a comparable home, for the same amount as rent. However, please keep in mind that your rent payment will increase every year. Your mortgage payment will not. (It can actually decrease if you refinance the loan). , and best of all you build equity. You can’t build equity when renting a home. So if you sell your home later on down the road you could walk away with a hefty profit.
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