A home may be one of the most important and most expensive purchases a person may make in their lives. But this doesn’t exactly mean it isn’t affordable. There are many ways that will allow you to get more bang for your buck when it comes to an affordable home. Whether you’ve thought of reaching out to an advisor mortgage or going on a solo mission, rest assured that you’ll be able to make it. Here are a few myths that make it seem like real estate purchasing is a far off dream and just exactly why they’re myths.
You Need 20% Down To Purchase Real Estate
This is a myth simply because there are so many ways to get a lower down payment rate. Some may even have a 0% rate, in the case of veterans. Some government-backed loans are the same.
The myth of the 20% down came from the suggestion of many mortgage lenders’ private mortgage insurance requirements. The 20% is merely a suggestion and not a hard-stop rule that will stop you from ever owning a home.
Never Get An Adjustable-Rate Mortgage
Getting an adjustable-rate mortgage means that for a period of like, for example, ten years, your interest will be fixed and you will be paying a standard amount monthly. After these ten years, the rate will then fluctuate. An adjustable-rate mortgage may seem daunting because there is no guarantee how much the percentage will increase or decrease. You may worry that you may no longer meet the monthly cost and the chances of losing your home is on the horizon.
The kind of mortgage will be completely your decision! You will need to do your research and decide what your plans are for your home a few years down the road. If you think that you would like to have a bit more flexibility with your finances but you plan to keep this house as your forever home, then maybe a fixed mortgage would be the best choice. But if you think that you’ll be able to pay for your home in full in just a few years, or if you plan on selling the home after a few years, then the adjustable-rate mortgage may be for you.
You Need To Have A Perfect Credit Score
Just as no one is perfect, no one is completely debt-free. There isn’t a single “perfect” credit score in this industry. You don’t have to completely wipe out your credit card debt before you can even think of taking out a mortgage (though that would still be a pretty good idea). CEO of Fortune Builders, Than Merrill, says that even if you have a so-so credit score, lenders actually vary in what is and isn’t acceptable to them.
There is great importance that needs to be put on planning and researching when it comes to purchasing a home. It isn’t merely about what fits in the budget and what ticks off all the boxes in your checklist. There are many great ways to find an amazing and affordable home and it starts with making sure that your mortgage and your lender have the same thing in mind and that you’re working with what you want and can do. Remembering these myths and why they’re myths are the first step to confidently and affordably purchase your new home!