Don’t Believe These 5 Myths About First Time Home Buying

If it is your first time to buy a home, you probably have plenty of questions about how to go about things successfully. There are many misconceptions about mortgages and home buying, and a first-time home buyer might find himself in a bind or unable to take advantage of an opportunity. If you are buying your first property, here are some myths you should stop believing about the process.

5 Myths About First Time Home Buying

1. Your down payment must be 20 percent or more. Putting a down payment above 20 percent indeed means you do not need to pay for PMI or private mortgage insurance. However, if you put less than 20 percent, you could be in a more financially sound position. If you have good credit and a constant income source, you could put down less than 20 percent and start building your equity.
2. People with student loans cannot get a mortgage. Lenders do not look at how much you owe in all. Instead, they consider how much you pay every month and how your debt compares to your income. If you still have student loans, do not write off homeownership; as long as you have a stable income, it’s possible to get a mortgage.
3. You shouldn’t get adjustable-rate mortgages. The 2008 housing crisis caused buyers to become wary of adjustable-rate mortgages or ARMs. If you are sure you’re refinancing or selling your home in ten years, though, an ARM can save you thousands of dollars.
4. There aren’t any affordable mortgage plans. There are several affordable lending options like Fannie Mae, FHA loans, and other types by government-sponsored entities. Banks also subsidize loan discounts, letting first-time home buyers qualify for more attractive prices. Note that lenders could base your eligibility on your earnings, the median income in your area, and other factors.
5. One pre-approval is enough. Pre-approval to buy a home at a specific price does not mean anything other than you are likely to meet that specific property’s financial requirements. Even if you have been pre-approved for buying a home, the property itself can impact your ability to borrow and even the final cost. For example, things like property type, tax rates, and association fees could affect the mortgage’s cost and terms. A condo or townhome, for instance, might have a higher rate than a single-family unit.

Furthermore, suppose a bidding war results in your offer going even slightly over the federal government’s jumbo loan limit. In that case, your loan might have different eligibility requirements and rates than what you anticipated. 

Contact a Mortgage Specialist Today!

When you want to buy a home for the first time, there are many things to analyze. Aside from the look and furnishings, you must also consider how you can fit into your budget the mortgage payments for this house. Since you’re buying a home for the first time, you might not know enough about how to make mortgages work for you. It helps keep these myths in mind so you do not disadvantage yourself when buying a home.

Let Americas Mortgage Solutions help you find your dream home today. We help first time home buyers in Palm Beach, FL, secure low rates through hassle-free loan experiences. Get in touch with us today at (561) 316-6800 to learn how you can get your mortgage pre-approved!