Almost all adults in this country believe that home ownership is an important part of the American dream and that it increases financial stability. But many people think that owning a home is out of their reach. In truth, many perceived obstacles are simply misconceptions about what is required to purchase a home. While we can’t speak for the lending industry, you may find this general ‘debunk’ information helpful, a lot of our clients decided to pursue home ownership after exploring their options, rather than continuing to rent. After reviewing these points below, you may discover that you’re more ready for home ownership than you think.
“Mortgages are the same with every lender”
All lenders offer a variety of products, interest rates, credit score requirements and fees for mortgage loans. You want a company and loan officer you can trust. As always, you should be able to turn to your real estate agent for advice. Agents most often have a short list of mortgage companies they work with regularly and rely on to provide their clients with excellent service.
“Renting is always cheaper than buying a home”
Finding affordable rental homes is a big challenge. However, renting may be your best choice if you plan to move frequently. If you plan to stay in your home for a longer period of time, buying is likely the better financial choice. Assuming that your home appreciates in value, you should realize a good profit when you finally decide to sell. Also, you can have a fixed-rate mortgage that won’t change instead of facing the risk of a surprise price hike in a monthly rental fee.
“You need to have 20% for the down payment”
A lot of people still believe that they must have between 17% and 21% of the purchase price for a down payment. Many people are approved for a mortgage loan that requires much less down. Loan programs through the VA, FHA and USDA all have low down payment programs if you qualify. Discuss with your lender what is possible in your case, also be sure to talk about other expenses you should be expecting. Knowledge is power and this information is absolutely crucial for you and your agent to know, especially when you are ready to make an offer.
“30-year fixed-rate mortgages are the best option”
A traditional fixed-rate mortgage is likely the best choice for buyers who intend to stay in their home for many years. However, an adjustable rate mortgage may be a better choice for those who know they will move within a few years. Additionally, there are shorter fixed rate mortgages that will have a higher monthly payment, but will save a lot in interest charges. This may be a good choice for buyers expecting to retire soon. Look at all options. A traditional 30-year loan may not be your best choice.
Do you have questions about the home buying process? We’ll be glad to help!
Call/text Randy and Yvonne at: 517.962.8803 or send an e-mail to: firstname.lastname@example.org
Randy and Yvonne Hoyt
2300 W. Michigan Avenue
Jackson, Michigan 49202