Debunking the Top 5 Scary Myths of Home Buying and Selling

 

Shopping for a home is a tricky road to walk, especially as there tend to be a lot of myths leading to costly misconceptions. In this article, we will debunk the top five myths of buying and selling a home, so you can get ahead in this dynamic market.

Introduction to Home Buying Myths

Home-buying is fraught with myths. Before you go and look at that next house, watch out for these misperceptions that could keep you from making a wise decision. Myth No 1: The market is booming, so I’d better buy right now before I’m priced out. Myth No 2: All realtors are the same. Myth No 3: If I don’t like the first house, there will be plenty more fish in the sea.

Myth 1: You Need 20% Down Payment

One of the most persistent myths that prevents more people from becoming homeowners is the belief that buyers must have a 20 per cent downpayment. The mere thought of owning a home with no money down is a fantasy for most buyers who end up renting long-term. In reality, there are far more loan options available to most buyers requiring much less upfront investment.

According to stats, a majority of people who are in the market to buy a home are be first-timers, and are able to qualify for Down Payment Assistance in many places, allowing them the option to put as little as 3 per cent or even less down.

Understanding Down Payment Assistance Programs

These programmes aid home buyers with a down payment, which can be a hardship. They vary from state to state, and range from grants to purchase to loans. A national chain might not be inclined to take on the fuss but, in New Mexico, for example, local lenders offer several state-funded assistance programmes.

Most prospective buyers didn’t realise that they might qualify for such a programme: a recent study found that, overall, about 80 per cent of first-time home buyers qualify for some kind of assistance, but only a minority were tapping into the programmes available to them.

Myth 2: Student Loan Debt Prevents Home Buying

The second myth I hear often is that anyone with student loan debt should not buy a home. The thought is that borrowers with so much debt cannot afford to pay their mortgage.

Almost a fourth of home buyers overall, and 37 per cent of first-time buyers, carry student loan debt. Lenders look at many factors when assessing applicants, and student debt doesn’t necessarily preclude you from getting approved for a mortgage.

Myth 3: Saving for a Down Payment Takes Forever

For these first-time and aspiring homeowners, saving for a down payment feels like it will take years or even decades. Saving money is certainly important, but there are ways to accelerate the process. What’s more, thanks to the availability of down payment assistance programmes, many buyers may be surprised at how little they actually need to save.

Knowing what’s available can change your timeline dramatically, and help homeowners-to-be stop putting money into a landlord’s pocket and start investing in their own home far sooner than they might have thought.

Zero Down Payment Options: VA and USDA Loans

For qualifying buyers, zero-down-payment financing is available through VA and USDA loans, which help particular classes of homebuyers such as veterans and those buying in rural areas.

With a VA loan, for example, many veterans can buy their homes with no money down, so homeownership is a viable option for many of them. And loans backed by the US Department of Agriculture (USDA) require no down payment for buyers in designated rural parts of the country.

Myth 4: Home Prices Are Going to Crash

One of the most dangerous myths in the housing market is that home prices are poised to crash. People eager to own their own home hold back, thinking that buying now would be an exercise in futility because prices are sure to be far lower down the road. That reasoning can be dangerous and disastrous to one’s home buys.

Real estate markets have always been cyclical, of course. But, more often than not, they’ve showed upward movement over time. Experts say that home values are projected to appreciate by an average of 4 per cent annually for the next five years.

Understanding Market Trends and Expectations

Knowing the trends of the market is most important to make a right decision to invest in the property. Various aspects in real estate affect the market including the macro economic condition, interest rates and the demand of the consumers. Some local markets may go down, however, the over-all direction of the market is showing an increment in the price of home.

Here one must always remember that land or real estate is a long-term investment. If one avoids it simply because the prices vary in the short term, then one will never enter the market, there are always factors that could bring down the property’s value. However, the prices can continue to rise and so could the rate of interest.

Local vs. National Market Dynamics

At the local level, real estate prices can defy national trends. What drives price action in an area varies depending on local jobs and economic growth, demographic trends and local employment fundamentals.

For instance, while some markets are bruised by economic hardship, others are enjoying industry booms, and outcome-based research will enable buyers to understand local drivers of home prices.

• Local Economic Indicators: Job growth, business development, and population changes.
• Interest Rates: National trends versus local lending rates can impact affordability.
• Supply and Demand: Local inventory levels can dictate pricing trends.

Conclusion: Making Informed Decisions

As a summary, it is worth pointing out the inaccuracies of the myths regarding home-buying, so purchasers can make solid conclusions. Since most of them believe that home prices will fall again, this can discourage buyers from purchasing property and enjoying the advantages of home ownership.

(When you know what’s really going on in your market — whether on the local or national level — you’re a far more powerful buyer for knowing it.) Your real estate agent should connect you with data that applies specifically to your situation and individual market.

Stay Updated with Real Estate Trends

An informed view of the real estate market can enhance your buying or selling experience. Reviewing market reports, economic outlooks and local developments periodically can also help you gain some clarity.

Subscribe to real estate newsletters, follow housing blogs, or talk to local agents who can give you inside information daily. You have to keep up with what’s happening in order to make smart investments.