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Top 5 Myths That Trip Up First-Time Home Buyers

Top 5 Myths That Trip Up First-Time Home Buyers

There is no shortage of opinions and we are sure you have received plenty of advice from family and friends. You have heard the horror stories, you've seen the HGTV shows, and your social media feed all relating to home buying. One thing is true: home buying is a big decision and it can oftentimes be scary.

With so much information to sift through, it can be tough to distinguish fact from fiction. That's why we're revealing the truth behind some of the most common home buyer myths and misconceptions.

If you equip yourself with the knowledge and find the right team of custom home builder professionals, you will be empowered to make the right decision for you, your family, and your financial future.

DON'T FALL FOR THESE COMMON HOME BUYER MYTHS

Myth #1: You need a 20% down payment.

Most buyers, especially first time buyers, do not know this.

Plenty of buyers are purchasing homes with down payments that are much less than 20% of the total cost of the property. Today, you can buy a home with as little as 3-5% down. However, if you are putting less money, you may be seen as a riskier borrower to your lender - more so than others who down a full 20%. Because of this, you will most likely need to pay mortgage insurance as part of your monthly payment.

Today, there are many programs out there that allow a lower down payment, and a lender or mortgage broker can talk you through what is best for you. However, if you are putting less money, you may be seen as a riskier borrower to your lender - more so than others who down a full 20%. Because of this, you will most likely need to pay mortgage insurance as part of your monthly payment.

Myth #2: Fixer-uppers are more budget-friendly.

You've probably seen shows on HGTV that highlight fixer-upper homes. Every show encourages people to purchase these homes because they are more "more affordable"; however, this isn't always the case. It is a lot of work and it is expensive.

If you're looking to buy a fixer-upper home that needs the kitchen, bathroom, or other comparable rooms renovated then you could be looking at a bigger project than you anticipated. With bigger projects come longer completion times and higher prices. Red Door Homes NC offers 20+ new home customizable floor plans from $89,000 so there's no reason why you can't find a home that checks the boxes on your home wish list.

Myth #3: You can't qualify for a mortgage if you're still paying off student loans.

While some buyers feel more comfortable paying off their existing debt prior to stepping into homeownership, it's not a requirement. When applying for a loan, lenders are looking at your debt-to-income ratio more than anything else. If you want to calculate this on your own, add up all of your monthly debt payments and divide those by your monthly income. When the lender does this, they're making sure that you will be able to afford your monthly mortgage payments along with your other existing payments and debts. If your income is high enough to allow you to make all of these payments each month, having a student loan will most likely not stop you from getting a mortgage.

Myth #4: It's all about location.

You've heard the phrase. Location is everything. The real estate industry repeats this until they're blue in the face. Surprisingly, this is not always the case. Location is great when it comes to commuting and school districts, but it doesn't always equate to quality of life. Do you sacrifice the square footage in a cramped space to live in the thick of a bustling city or do find a larger home for your family just outside of the city in the suburbs? The latter in the long run is probably best (and most functional) for you and your family. And, in most cases, property taxes will most likely be lower!

Obviously, you might still want to choose an area with great resale potential, and this is something that a  Dream Home Consultant at Red Door Homes can speak to you about. They're an expert in your city and are constantly monitoring buying and selling trends.

Myth #5: A modular home is more affordable than a stick-built home.

At Red Door Homes NC we know this is not true. We've shopped modular home builders and found it difficult to get an end-all price. After sales tax, higher insurance rates, and home depreciation you'll find yourself spending a lot more than the home's advertised price.

Compare that to a modular home, it's a custom home built on your lot (so the value increases with time), there's no sales tax, and you have 20+ home plans starting at $89,000 to choose from. Learn more about the difference between a Red Door Home and a modular home here.

BUT MOST IMPORTANTLY, WE'RE HERE TO HELP

Whether you're a first-time buyer or a seasoned homeowner, there's no reason to go through the home buying process without an advocate on your side. We're here to answer your questions and do the hard work for you, so you can spend your time dreaming about your new home. Call us today at  910-218-8750 to schedule a free, no-obligation consultation.

11/06/2019

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