If you're dreaming of owning a home, you may have come across some conflicting advice or encountered some myths along the way. It can be hard to sort out the truths from the myths, and it's even harder to make a decision when your future and finances are on the line. That's why we're here to help you navigate the truths about buying a home.
Unveiling the truth behind the myths, this article will provide you with a comprehensive breakdown of some of the most common homebuying myths. You'll be better-equipped to make an informed decision and take the first steps toward homeownership.
Myth 1: You Need a 20% Down Payment to Buy a Home
We've all heard it. At the very minimum, you will need 20% of the home's purchase price as a down payment to buy a home. But is it true? Not necessarily. In fact, there are many loan programs available that allow you to buy a home with as little as 3.5% down. While you will likely need to pay private mortgage insurance (PMI) until you reach the 20% equity threshold, it can be a great way to get into a home with a smaller down payment.
Additionally, some buyers may qualify for down payment assistance programs that provide grants or low-interest loans to help them with the down payment. These programs can vary from state to state and are available to first-time homebuyers or those who meet certain income requirements. Be sure to check with a First Savings Mortgage Loan officer to find the local housing options that may be available to you.
Myth 2: You Can't Use More Than One VA Loan
The VA loan program is a great way for veterans to purchase a home without the need for a down payment. Many people assume that once you have used this benefit, you can't use it again. This is not true. While some restrictions apply, veterans can use the VA loan multiple times as long as they meet the eligibility requirements.
Veterans can use their VA loan entitlement multiple times as long as they have a valid Certificate of Eligibility. A veteran's entitlement can be restored after the existing loan has been paid off in full. However, the VA does not allow veterans to use the loan for investment properties. In addition, the veteran must meet all other eligibility requirements, such as income and credit score.
Myth 3: Renting Is Always Cheaper Than Buying
This is a common misconception among potential home buyers. While renting may be cheaper in the short term, there are many advantages to buying a home that make it a better financial decision in the long run.
When you buy a home, you build equity, you can deduct mortgage interest, and possibly enjoy the stability of knowing your monthly payment will stay the same (in a fixed rate mortgage). In addition, when you buy a home you may be eligible for tax credits, and you can use the property as collateral if you need to borrow money. Owning a home also allows you to make improvements to the property, own an asset and when selling, get your money back and likely even make a profit!
Myth 4: 30-Year Fixed Mortgage Is the Only Way to Go
The 30-year fixed mortgage is a popular choice, but it is not the only option. Depending on your situation, you may be able to take advantage of an adjustable-rate mortgage, an interest-only mortgage, or a balloon mortgage. Other mortgages may also offer shorter terms such as a 10-year, 15-year, or 20-year fixed rate mortgage.
Ultimately, the best route for you will depend on your financial situation and the length of time you plan to stay in your home. Before you decide, it's important to do your research and determine which mortgage option is the best fit for your needs.
Myth 5: Spring Is the Best Time to Buy
There is some truth to this old adage, but it's such an outdated concept that is no longer valid. With the fast-paced nature of the modern world, prices are constantly fluctuating and there really is no one "perfect" time to buy. That being said, there are certain times of year that present better buying opportunities than others.
But, life doesn't revolve around the perfect time to buy, so don't make decisions based on outdated myths. Instead, do your research, compare prices, and find the best deal available at the time.
Don't Let Myths Keep You from Buying a Home: Learn the Facts
The key to making the best decision when it comes to buying a home is to do your research and make sure you understand the facts. Don't be held back by myths that are not true.
If you have any questions or concerns, the team at First Savings Mortgage is available to help. We have many loan options available to meet your needs. Contact us today to get the information you need to make an informed decision about your home purchase