Let me paint you a picture: you’re browsing the internet looking for potential dream homes, when you start to drift a bit. Perhaps you find yourself four hours in and looking at home buying articles rather than the houses themselves. There’s nothing wrong with this; after all, you should be doing as much research as possible. But how do you know what’s right and what’s wrong? Do you listen to the article exclaiming that now is the perfect time to buy or do you follow the advice of the article claiming homeowners are 92% more likely than renters to file for bankruptcy during their lifetime.
No doubt it can be confusing, so we’ve found the most common home buying myths out there and have debunked them for you.
1.) You have to have perfect credit to buy a home. No, you don’t. It helps, of course, but let’s be honest; when does not having perfect credit ever make a situation better? The fact is your credit score does affect your mortgage loan approval and the interest rate of the approved loan. You may have made some mistakes in the past, but as long as you can afford the rate you get and are practicing good money management skills now, your credit rating is more of a nuisance than an obstacle. And as long as you are smart with your money and continue to improve your credit score, there is always the option to refinance in the future.
2.) Owning a home is cheaper (or more expensive) than renting. Any article will often say either of these extremes, and honestly, you shouldn’t listen to either one of them. There are many things that make owning a home cheaper than renting (numerous tax breaks, a gradual build of equity), but there are also a number of things that make owner a home more expensive than renting, like home maintenance costs and homeowner association fees. Every home is different. It’s up to you to find out exactly how much you will be paying and if it’s less than (or worth) the amount of money you’re currently paying in rent.
3.) Someone is always trying to screw you out of something. Whether it’s your lender, your contractor or your real estate agent, countless people will tell you to trust no one. This is ridiculous.
What you should do instead is the proper research on each of these individuals, and then when you are satisfied let them do their jobs. Find a real estate agent with fantastic references and reviews, and then let them work to find you the home of your dreams. Find a lender you feel comfortable with, and hire a lawyer to read through all the paperwork with you (this is probably the largest purchase you’ll make in your entire lifetime; you need to read the fine print), but don’t go through the entire process looking over your shoulder the entire time. Some people will try and take advantage of you, but the majority won’t. Weed out the ones who will and you’ll be good to go.