Millennials and Gen Z are breaking into the homeowner market. With the power of the internet and social media at your fingertips, you’d think you would have all the information you need to make the best decision for you and your family.
On the other hand, having so much information available and so much advice from parents and older relatives can muddle the home buying process. Who and what do you believe? Do you trust your real estate agent, whose aim is to make money off of you? Do you listen to your parents, who bought their house over 30 years ago?
A house is one of the most significant investments you will ever make in your life. If you’re wary, you’re right to be. But this doesn’t have to be a stressful endeavour. Arming yourself with knowledge will go a long way in making the entire process much more smooth.
Here are five common myths and misunderstandings that can cause issues for all first-time homebuyers:
Myth #1: A 20% Deposit Is Required
This myth has been bandied about in the real estate industry for decades, and it is one of the biggest things keeping potential homeowners from taking the plunge. A 20% deposit on a $500,000 house is a big ask for many.
The truth is, you can buy a house with as little as 3% to 5% deposit. If you qualify for certain loan programs, you can even get that down to 0%. There is genuinely no hard and fast rule. Get in touch with a reliable mortgage lender to discuss all your options.
Myth #2: All You Need Is a Deposit
The home buying process does not begin and end with a deposit and a mortgage loan. The truth is that even just closing a deal with a seller can cost you up to 3% to 4% of the final purchase price due to attorney fees, inspections, real estate agent commissions, transfer taxes, and more.
And once you own a house, you are responsible for all the maintenance and repair costs, property taxes, and homeowners’ association fees. This is why you need to nail down a realistic budget for the home you will buy.
Myth #3: All My Mortgage Information Is Online
There are dozens, maybe even hundreds of websites offering finance calculators for future home buyers. While these online apps can give you a number around the ballpark of your monthly home loan payment, don’t get yourself attached to any estimates until you speak with a lender directly.
Myth #4: I Don’t Need a Real Estate Agent
Many potential homebuyers balk at spending any amount on real estate agent commissions, so they try to go about the process independently. This is the biggest mistake any buyer can make.
The best real estate agents know the local market back to front, and they will dedicate hours in the effort to get you the best deal possible. You will be working closely with them for months at a time. And besides, your real estate agent’s fee is paid for by the seller, anyway. So no, their services aren’t too expensive.
Myth #5: I Can Just Buy a Cheap Fixer-Upper
In the age of HGTV and DIY, many people think that they can settle for a cheap house and fix it up themselves. They don’t even consider the significant expense and endless hassle of home renovation.
If you have your heart set on doing a lot of work on your new home, get quotes from local contractors so you can factor those costs into your budget.
Conclusion
Now that you’ve been set straight on these common myths, you can take the first steps in the home buying process. Find your perfect neighbourhood, ask around for real estate agent recommendations, and consult with a lender so you can set a tentative budget. Soon enough, you’ll be the proud owner of your first home. Congratulations in advance!
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