Home Buying Myths
Buying a new home is one of those things that potential home buyers sometimes have a love-hate relationship with - they love thinking about it, and hate the logistics of actually doing it! There can be a lot of moving parts involved with buying a home, and there are also quite a few myths that, believe it or not, actually keep some of today's home buyers from even trying. One of the most pervasive myths that we hear is the down-payment myth, i.e. in order to buy a home today, you have to have at least 20% down.
It's true, having a 20% down payment is a great thing, and it can certainly give you some options like avoiding private mortgage insurance (PMI). However, there are a number of mortgage-loan options out there that do not require anything near a 20% down payment. Take the VA loan for example: If you have or can get a Certificate of Eligibility from the VA for qualifying military service in the U.S. Armed Services, you may have the option of getting a VA loan, which allows a qualifying veteran to buy with no down payment - yes, a 100% loan. This is a great benefit that veterans don't always use or even know about. If you have it, it can be a great option.
Another option is the FHA loan, which requires a minimum 3.5% down payment. You'll find this to be a relatively expensive loan in terms of fees and it does require PMI that runs your monthly payment up, buy it can be a great way to start buying a home. Many first-time buyers opt for the FHA loan because they don't yet have equity from another home to use for the down payment.
These are just a few mortgage-loan options that debunk one of the most common home-buying myths out there. If you want to explore your loan options, contact us and we'll put you in touch with a local mortgage lender who can discuss your specific situation with you over the phone. Once you're pre-qualified for your loan, we'll go to work to help you find the perfect home.