Buying a Home: 8 Ridiculous Myths!

One of the biggest investments that people will make is buying a home. The purchase of a house has become nearly an overwhelming task in and of itself. When the housing market collapsed, and took the economy with it, having doubts about that big a commitment is really just being smart. There are many legitimate concerns about buying a home, but in the wake of the bubble bursting there have been more than a few myths that have sprouted up around the idea of purchasing a home. Let's take a look at some of the most common myths in regards to buying a home and follow it up some facts.

8 Active Myths | Suggest a Myth
MYTH: 30-year mortgages are the only way to go.

A mortgage is the representation of the money that the homebuyer is borrowing from the lender. For a long time a 30-year mortgage has been considered the perfect investment, and can be, for some people. However when a homebuyer only plans to own the home for a short period of time, a shorter mortgage can be pursued. This will save money for the owner in the long run.

MYTH: A great credit score is integral to purchasing a home.

There are few numbers more important to potential homebuyers than their credit. A great credit score can help homebuyers with getting better rates and a cheaper purchase. However, it is not necessary to have perfect credit to buy a home. In fact, with the right finances in order even someone with bad credit can buy a home.

MYTH: Homebuyers need huge down payments in order to purchase a home.

The down payment is a homebuyer’s best friend when they are looking for a way to reduce their monthly mortgage amount. The common number floating around via most realtors is 20%, which can be a pretty large sum depending on the purchasing price of the house. The truth is that there is no perfect number for a down payment and some buyers even forgo it completely.

MYTH: Good luck if you just changed jobs

While it is true that lenders will look at the job history of their potential creditors, this is not the be-all end-all of situations. If a homebuyer has changed their jobs several times in the past few years they tend to believe that they will not be able to get a loan. This isn't true. Lenders understand that jobs are changed all of the time and as long as a stable income is represented things will be fine.

MYTH: This is a terrible time to purchase a house!

When the housing market crashed half of a decade ago it ruined the financial situations of a lot of people. However, since the crash the market has slowly been climbing. Fixed rate mortgages are at near historic lows and more foreclosures are available on the market. For the savvy investor there is no better time to strike.

MYTH: Renting a home is invariably cheaper.

When looking at property ownership it is important to process things on several different levels. A home purchase will carry with it many necessary evils such as: property tax, mortgage rates, and down payments. These evils, however, all go toward creating equity for the homeowner. Renting a home is simply paying toward the original owners equity, which does not equate to the same value

MYTH: Personal information will be sold by lenders.

In the age of information it isn't uncommon to fear the leaking of one’s private documentation. When purchasing a home, amid all of that paperwork, sensitive information does get moved about. Many first time buyers are afraid that their information will be freely given out or sold by credit lenders. Rest assured that this will not happen as there are state and federal laws set in place to prevent it.

MYTH: A missed payment can lose the house.

Though foreclosures are on the rise, this is actually the last thing that most credit lenders want to deal with. A foreclosure costs money and typically loses value at auction. If a home owner comes into hardship, or fears that they will lose the home, all they need to do is contact their lender to work out a solution.