People have different opinions about different things, some can agree about some things and some can not. Like most things, people believe in some opinions or we say myths about the homebuying process. When a person starts dreaming and searching for their dream home they often get to know some information or myths about it. Today in this article Anthony Wardan, the director at Maple Living, will tell you about some common myths that people believe while buying a new house.
Excellent credit score is necessary
One of the most common myths that people believe in while purchasing or planning a house is that you need an excellent credit score. No, you do not need a perfect credit score to qualify for a home loan, when a bank is considering you to lend a loan all they look for is your ability to pay back your mortgage.
A higher credit score comes into play to lower the interest rate for your loan. A low credit score means a high rate of interest and vice versa. The most important factors a lender looks for while lending you a loan are steady employment, and income source. You can still qualify for the loan if you have a low credit score and steady employment while a homebuying process.
There is no 20% down payment rule
One of the most common myths that people believe is that you need to pay 20% of the down payment. There is no such thing as this, yes some home loans make you pay 20 % but this thing differs from company to company. There are some companies that only need you to pay less than 3.5% of the total cost. This is the most common myth that people believe in while buying their dream home as a new homebuyer.
Not a right time to buy
There is no right and wrong time to buy a house, the rates of mortgage are still stable that is giving all the potential homeowners a good time and opportunity to buy a homeland save lots of money. The mortgage price is continuously falling down that is allowing the people to move out of their rented houses and move towards their own homes. The rent prices are rising and climbing making buying cheaper than buying. Data from the past 10 years have shown that the month of October is the most suitable time to purchase a home if you are planning to buy a house.
Renting is more beneficial than buying
This is the most common myth that people have in mind while homebuying is that renting is more beneficial than buying. No renting is not beneficial than buying one of the biggest benefits of buying over renting is the amount of money that you will save in comparison to renting an apartment.
As Anthony Wardan told that how the rates of renting are increasing year by year. As much as 8% imaging buying a house and saving as much as 8% more in a year. Renters are usually paying a big part of their income as their rent. The rent you are paying can become your EMI for the house and the most important benefit there can be is that you will own your own house. Renting can not only be harsh on your pocket saving. There is a sense of security in your own house.
Conclusion
There is a very popular idiom 100 mouths 100 words this applies very well here, when you step out in the market to buy your own house you will get to know many myths and advice from many people no matter they know you or not there will always be myths in the market and above here in this article, there are some common myths that people believe in.
Some people think that you need a high credit score to get approval for a home loan that is totally wrong, you only need a stable income source to get approval for a home loan. Some people think renting is more beneficial than buying your own house which is also not true. Renting is the biggest expense that cuts down your savings and people who are renting houses know-how the prices of rent are rising year by year.
There are many things that people need to educate themselves about before stepping into the market while homebuying process, either way people get confused by the myths that are floating around in the market. This can cause any person to take a wrong step in the direction which can cost them a huge fortune and capital loss, Anthony Wardan concluded. Take help of the internet and people that have knowledge about these topics then only step into the market. Hence, here are all the things about some common myths people believe while homebuying and everything you need to know regarding that.