Two myths that are holding back home buyers. Buying a home is a huge commitment and one which should be considered carefully before undertaking. Not only are you committing to years of the mortgage, but you are also putting down roots in a community for some period of time. As more and more millennials consider the pros and cons of buying their first home, they’re often confronted with a barrage of information containing half truths and outright lies. Here are two common myths which cause potential buyers to hold off from buying a home.
Myth number one, you have to have a 20% down payment. Although loans with less than an 80% loan-to-value do require Private Mortgage Insurance, which does add cost to the monthly payment, there are many options available with a lower down payment. Many lenders offer conventional loans with 5 to 10% down, FHA loans for first-time home buyers require only 3.5% down payment, and qualified veterans can also use the VA loan program to purchase a home with zero down.
Myth number two, you need great credit. While it is certainly helpful to have a high FICO score, there are loan programs available for buyers with lower scores. In fact, a survey done last fall indicated that over 50% of new loans in the past year were for people with FICO scores in the 600 to 649 range.
Before you assume you aren’t ready to buy a home, talk with a lender and learn your options. Don’t let these myths keep you from a new home, and feel free to reach out to me if you have any questions.
-Kira Brown, “Beach Living Made A Breeze!”
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