Updated: Apr 16
Buying a home is certainly a complicated task. You don't always enter a house, see that it's perfect and pay for it (although it has happened quite a few times with us!) Most situations involve a lot of open houses, negotiations, papers to be processed, inspections, applications to be made, and more papers. That's why it may be daunting for renters to start the home buying process.
To make matters worse, there are certain myths or beliefs about homebuying that are certainly not the entire truth. Read on to debunk these popular home buying myths!
Homebuying Myth 1: You need a credit score of 750 and up
Truth: You can still buy a home even though your credit score is low
VantageScore's Rating Categories are as follows:
781 - 850: Super prime
661 - 780: Prime
601 - 660: Near Prime
500 - 600: Subprime
300 - 499: Deep subprime
And it's easy to fall into the thinking that getting a score under Near Prime and below would not give you a chance to buy your dream home. Although getting an excellent credit score definitely helps, there's still a chance for you through Federal Housing Administration Loans, and there would even be lenders who will help you improve your credit score.
On average, the state of California has a credit score of 717. This is an ideal comparison figure when receiving your credit score and asking for help from lenders.
You can get your credit score for free once a year, so take advantage of that to track your capability of getting a home, and immediately ask a real estate expert for advice for the next steps to take.
Homebuying Myth 2: The downpayment should always be 20% and up
Truth: You can buy a home without a 20% downpayment!
There are several options for you that would not require a 20% downpayment. According to Realtor.com, the Federal Housing Administration requires a 3.5% down payment only, eligible people can apply for a VA loan without any downpayment, and the United States Department of Agriculture also offers a zero down payment for those who have low to moderate-income. There are also a lot of down payment programs that offer financial assistance across the country, so there are really a lot of options for you.
Homebuying Myth 3: You won't be able to relocate for a long period of time
Truth: There are several options for you if you want to relocate and leave your purchased home!
Maybe what's stopping you from buying a house is that you're the type of person who easily gets bored and does not want to be stuck in the same location. If so, there are still so many ways to utilize your future real estate investment if the time comes that you would want or need to relocate.
Spice up your place by having it renovated or styled in a different way. Having your own place gives you the liberty to decorate and style your home in any way you want. Renovating, and even just redecorating give a home a fresh vibe to an old home.
You could rent it out. A lot of travelers are loving that home vibe of rentals through apps such as AirBnB, Booking and so much more.
If you're decided to move on from your formerly purchased home, you could always sell it and still get a great deal. It is no argument that real estate is still the best investment one could do.
Speaking of moving, click here for great, practical tips during a move!
What myths are still lingering in your mind? If you need to talk to a real estate expert, contact us. We'll be glad to explain these matters to you.
Still afraid to make the move? Read the Greater Bay Area market update here to help you make an informed decision.