Do not believe everything they tell you, because not all of it is true. You have probably heard this piece of advice repeatedly, but you don’t know that it applies to your first time buying a home. It’s time to debunk these common myths.
1. You should not put less than 20% down payment
Well, it is true that putting more than 20% means that you will not pay for mortgage insurance. Therefore, borrowers with a steady income and a good credit score can consider paying less than 20%. This will not only allow you to purchase your home sooner, but it also means that you start building your equity early.
2. Now is not a good time to purchase
The real estate industry has been appreciated considerably recently. Many home buyers feel that they should wait for prices to go down before they buy a house. If you wait, the market might go up by 20% and you will eventually pay more than you would have initially. The best time to buy is when you are ready.
3. You will not qualify for mortgage if you have a student loan
Gone are the days when people would wait until they were 40 to buy a house. Today, people in their 20s are choosing to purchase homes. So, there is no need to wait until you have finished paying your student loan because you can qualify now. Lenders do not consider how much debt you have, but rather how much money you pay towards it every month. As long as your income allows it, you will qualify for mortgage.
4. It is cheaper to rent than to buy a home
If you consider your current monthly outflow, this could be true. However, that is only a temporary situation as rent is bound to increase over time, yet your mortgage payment remains steady. The more you wait before buying a house, the higher the housing payment.