Homebuying Myths

Homebuying Myths

1. I can’t buy a house because I don’t have a down payment.
   The great new is there are many ways that you can buy a house with no down payment these days. Many lenders will allow you to receive your down payment money as a gift from the Seller of the home through a 3^rd party non-profit organization, such as Ameridream and Nehemiah. You will find information on the Ameridream Down-Payment Assistance Program later in this Home Buyer’s Guide.
   
   In addition to these programs, many federal, state and local programs are available for loan or grant down payment and/or closing cost assistance to Buyers based on various criteria, such as income or neighborhood. Information on some of these agencies and programs is available in this Home Buyer’s Guide.
   
   Creative lenders also have many ways of helping Buyers who have no down payment. If you have good credit, you may qualify for a mortgage up to 103% of the purchase price! Other ways are to get a first and second mortgage from different lenders. Tell me about your situation, and I will put you in touch with a lender to determine the best financing for you.

2. I can’t afford the monthly payments on a house.
   Interest rates on mortgages are currently near all time lows. Buying a home today is more affordable than you ever imagined! Many lenders will also allow you to ‘buy down’ your initial interest rate to lower your monthly payments for the first several years, making it much easier for you to qualify for your ideal home.
   
   The other factor to consider is that you get a tax deduction for the interest you pay on your mortgage. That means you will have more money to take home every month, which you can apply to your mortgage instead of rent. Remember – a home is an investment, paying rent is an unrecoverable expense.

3. I have credit card / student loans / other debts that I need to pay first.
   The truth of the matter is, no matter how long or hard we may try to pay off our debts, they always seem to keep growing. If you wait until all of your debts are paid off, you may never own a home. The best time to buy is always today! In fact, buying a home can help you pay off your other debts faster. For instance, current mortgage rates are much lower than the interest rates on credit cards, auto loans and even many student loans. Many lenders will allow you to pay off those debts with equity from your home. The added bonus is that the interest you pay on your mortgage is tax deductible, whereas the interest you pay on credit cards, student loans and other debts is not.

4. I have credit problems and the bank won’t lend me money.
   Federal laws and programs have made it much easier for anyone to buy a home. The government has told the banking industry they cannot discriminate against anyone – even people with poor credit! There is an incredible amount of competition in the mortgage industry and there are lenders lining up to help you buy a home. Federally insured FHA loans are available to almost anyone and are not based on credit scores. If you cannot buy a home today, a lender can put you on a plan that will assure your approval for a mortgage within approximately 12 months.

5. I already own a home and I don’t qualify for first-time homebuyer assistance.
   This is one of the most common myths. In fact, many programs that provide homebuyer assistance do so for people who have owned many homes. For instance, anyone may get an FHA loan, but they may only have one at a time. If you currently have an FHA loan and wish to buy another house, all you need to do is refinance your other home to a conventional loan. Likewise, if you sell your current home, you will be eligible for FHA financing on your next home.
   
   Many first-time homebuyer programs will lend or grant money to homebuyers who are not first-time homebuyers, as long as they have not owned a house for more than 3, 5 or 10 or more years. The most important thing to do is to call me, and I will put you in touch with a lender who will find the right program for you.

6. I don’t have the time to take care of a house and yard.
   Don’t buy a house -- Buy a condominium! Owning a condo offers many of the same benefits as owning a house, but without many of the hassles. For instance, mortgage interest on condos is tax deductible. You can get FHA financing and down payment and closing cost assistance when buying a condo. Condominiums have associations which take care of landscaping and exterior maintenance. Owning a condo is just like living in an apartment – except you’re the landlord! Best of all, your condo will appreciate in value like a house and be just as easy to sell. In fact, many builders are selling single-family homes in condominium developments. You can own your own house and not have to take care of the yard or the exterior. Call me and I will give you the scoop on the best in condominium living.

REMEMBER – Ignorance is our worst enemy. There are many potential homeowners who have no idea that they could actually own a home. If you or anyone you know have any doubts about whether or not they can own a home, talk to me, and I will point out any other home buying myths that I might have missed here.