When you decide to purchase your first home you will have many questions and fears. Most of the fears you have are typical of first time homebuyers. Most of these fears are created by myths and when you actually look at each fear seperately you will discover that there is really nothing to fear at all. I will present some of the most common fears and myths first time buyers have and then I will explain the facts that prove these fears wrong.
Fear #1: I can’t afford to buy a home now.
Fact: Actually, you can’t afford not to buy a home now.
First, there is always a home you can afford to buy that will be a smart purchase for you- the only questions are what and where. If it’s “what” that matters to you, then keep pushing out the “where” until you find it. If it’s the “where” that matters to you, then keep narrowing your “what” until you find it. No matter what features it has or where it’s located, there is always a good buy for you.
Second, if you are paying rent, you can afford to buy. From a financial point of view, in the United States, the tax savings on mortgage interest alone usually makes up most of the difference between rent and a mortgage payment.
Third, the earlier you buy, the earlier you will benefit from equity buildup and will be well-positioned for any future appreciation. The fact remains, the sooner and more seriously you begin the process of buying your home, the sooner you’ll find the best buy for you.
Fear#2: I should wait until the real estate market gets better.
Fact: There is never a wrong time to buy the right home.
Historically, focusing on the market is never the smart approach to buying the right home. Whether right means the right price or the right property for you, waiting to time the market seldom works to your advantage. Trying to time the market in the short term is the easiest way to miss your timing for the long term. Keep in mind, it’s the long term factors that make real estate a solid investment. All you need to do in the short run is find a good buy (based on your needs and what is currently available) and make sure you have the financial ability to hold it for the long run. Once you’ve made the purchase, the long term benefits of equity buildup, value appreciation, and tax benefits will always make it a right decision.
While you should always be aware of the fluctuations of local market conditions, real estate tends to be much more stable and rewarding over time than other types of investments. With the help of your real estate agent you can find a home that meets your criteria and is a smart purchase in any market area and at any time. In the end, there are really only two ways to make money in real estate. You either hit the right timing of the market or you have enough time in the market, That is, you either happen upon the right moment to purchase your home or you hold it long enough for time to make your purchase right. If you miss the first, you most certainly can count on the second.
Fear #3: I don’t have money for the down payment.
Fact: There are a wide variety of down payment options available for you.
While many people believe that making a home purchase requires a substantial down payment, as mush as 20 percent, this is seldom true. As a first-time home buyers, options are always available to you that require much less than this number, some as low as 5 percent, some even less. Don’t let the lack of a substantial down payment prevent you from investigatin your home-purchasing opportunities. There are many legitimate and sound financing options to choose from, and it only makes sense to investigate which one is right for you, your circumstances, and your pocketbook. And, by the way, delaying your purchase while trying to save up for your down payment will mean delaying all the financial benefits of home ownership. In other words, waiting could actually cost you money.
Fear #4: I can’t buy a home because my credit isn’t any good.
Fact:A less-than-perfect credit score won’t necessarily prevent you from buying a home.
Typically, there are two types of credit challenges– a poor credit history or no credit history. First, while it is valuable to have a good credit score, a poor one shouldn’t keep you from talking to several lenders to explore your options. You might be pleasantly surprised at the outcome. You can expect that a good loan officer (or mortgage specialist) will be able to help you resolve your credit challenges, often by simply showing you how to move or consolidate your debts, or by referring you to a credit counselor who will put you on a plan. Even though this plan may take a few months to implement, it immediately gets you on the path to ownership.
Another challenge is having no credit history because you are new to the workforce or have not made regualr purchases on credit. In either case, there are still possible solutions that you will want to explore. One avenue for first time home buyers is to secure financing with the help of a cosigner, such as a parent or a close relative, who is willing to stand by your ability to make the payments.
It is worth noting that there is no better way to improve or establish your credit rating than by having a mortgage and making timely payments.
Fear #5: I can’t afford to buy my dream home.
Fact: The best way to get closer to buying your dream home is yo buy your first home
Very few people can afford to buy their dream home when they buy their first home. In fact, according to the National Association of Realtors, 69 percent of first-time home buyers in the United States compromised on some features of their first home. So you make some compromises, buy your first home, and start building equity. This approach takes you further and faster down the road to being able to own your dream home than if you hadn’t purchased a home at all.
Fear#6: I should wait to buy a home until I get married.
Fact: There is no reason to wait.
When most people say they want to wait until theyre married to buy their first home, what they are actually struggling with are two distinct issues: First, would it be better to wait until they had two incomes? And second, will my future spouse like the home I choose?
If marriage is not in your future, then neither of these issues matter and buying is the right decision. Putting off the decision to buy the right home is never the solution. Getting into the game as soon as possible is.
By the way, if marriage is in your future, then buying is also the right decision. If your future spouse doesn’t like the home, you can rent it or sell it and use the proceeds along with your possible dual income to buy one you both like. If your spouse likes the home, problem solved.
Fear #7 Buying a home seems way too complicated
Fact: Buying a home is complicated, but that’s why you have help.
No one would ever tell you that buying a home is easy. It’s not. That’s why there is a team of professional ready to guide you through the home buying process every step of the way. From your real estate agent to your mortgage officer to the professional who handles your closing and everyone in between, these experts make a complex process simple for you.
Every year, hundreds of thousands of people buy their first home. In fact, over a third of all home buyers are first-time buyers. So, why not you? After you experience the home buying process the first time, you’ll wonder why you didn’t do it sooner.
This information can be found in the book “Your First Home….. The Proven Path to Home Ownership” by Gay Keller with Dave Jenks and Jay Papasan
To speak with a professional REALTOR please email HunterWebb@verizon.net or call 469-951-2299.