When renters consider buying Atlanta homes, myths about home buying can sometimes prevent them from following through with the next steps. However, many myths are based on a lack of information about the issue or incorrect observations.
If you have already decided to buy a house, it’s important to understand the truths about the biggest purchase of your life. As a first-time homebuyer, you need to know what to expect (based on reality) when you decide to buy an Atlanta home. So read on to bust some myths about buying a home!
Myth 1: A 20% Down Payment Is Required to Purchase a Home
One of the biggest myths about buying a house is that you need a 20% down payment. However, this isn't always the case. Many government-backed programs will help you buy a home with as little as 3% down.
So don't worry if you don't have enough money to reach 20% of the purchase price of a house you want to buy. There are plenty of ways to get into your dream home. Talk to your lender about the options available to you, and start planning your future today!
Myth 2: Renting Is More Affordable Than Owning a Home
There is plenty of debate surrounding whether it's cheaper to rent or own a home. Some people believe that renting is always the more affordable option, while others claim that buying always makes more sense in the long run.
Some general truths about home ownership and renting can help you make an informed decision. While it's essential to run the numbers, in most cases, buying can be more affordable than renting if you plan to stay in the home for five years or more.
Myth 3: If You Have Student Loans, You Won't Be Able to Get a Mortgage
That's a common misconception: you don't have to pay off your college loans before buying a house. Lenders look at your ability to afford your monthly payments, not the amount of debt you have. Your DTI (debt-to-income) ratio is what they use to determine if you're eligible for a loan.
The DTI ratio is the percentage of your gross monthly income available for paying down debt. Keeping your DTI ratio in line with your income and paying off high-interest loans can improve your chances of qualifying for a mortgage, whether you have student loans or not.
Myth 4: A Flawless Credit Score is Required
Although it is ideal to have a good credit score when buying a home, this is not always the case. Mortgage lenders consider debt and income, along with credit scores when reviewing a mortgage application. There are also bad credit mortgage options if there’s no way to raise your score before applying for a home loan.
If you have a few dings on your credit report, don't worry! Don’t feel discouraged if you do not have a perfect credit score when trying to buy a new house.
Myth 5: Fall and Winter Are Bad Times to Buy
Many real estate agents will tell you that you should only buy a home in the spring and summer because that's when the market is hottest. However, purchasing during fall or winter might be a wise decision since you could find an off-season deal on the home of your dreams!
While many homeowners sell during the summer, it’s not the only time of year you should consider becoming a homeowner. Sellers motivated to sell during the fall or winter seasons may be more willing to negotiate on price on a home that fits your budget and timing.
Partial Myth 6: Interests Rates Are Increasing (So It’s a Bad Time to Buy)
You might have heard plenty about interest rates rising in recent months, and that is true: rates are higher in 2022 than in 2021. However, what makes this a “partialÃ¢â¬ myth is that current rates are still meager despite recent hikes if viewed from a historical standpoint.
Most first-time homebuyers look for the lowest interest rate available, and that’s a smart strategy! However, if your finances are in order and you've found a home you like, why wait on the chance that rates could dip much lower again in the near future? Remember that you can always refinance later to reduce your interest rate.
Myth 7: All Lenders Offer the Same Terms
When looking around for a lender, do your due diligence. Not all lenders consider the same criteria or offer the same rates and terms. A first-time homebuyer should request estimated loan summaries from at least three to five lenders, then compare.
Choose the right lender that will explain everything, including rates and fees, in simple terms so you can make an educated decision about what is best for you.
Myth 8: The Price on the Listing Is the Amount You'll Pay
Many people believe that the listing price of a house is what they'll pay after closing. However, this isn't always true.
Often, the listing price is just the starting point for negotiation between buyers and sellers. In addition, listing prices don’t include any closing fees, taxes, or other costs associated with purchasing a property.
Bust Myths About Atlanta Real Estate With Revolution Rental Management
We hope we've helped bust some myths about homeownership today. Our Revolution Rental Management real estate professionals can assist you if you're considering purchasing Atlanta real estate as your first home! Take the next step by reaching out to our team to learn more about how we can help you go from “renterÃ¢â¬ to “buyer.Ã¢â¬
Download our free guide, 'The Hidden Benefits of Home Ownership for Current Renters, 'to learn more about the advantages of becoming a homeowner.