For many people, home owning is synonymous with the American dream. But there’s a lot of confusion out there, and that’s why most people end up believing that having their own house is far from their reach. Busting the following myths will help you understand that the process of owning a home is a lot less scary.
Myth #1: You can’t buy a house if your credit score isn’t excellent
It’s true the high credit scores attract better interest rates. Typically, scores of 720 and up draw the best rates. However, even when your credit score is less than perfect, you still stand good chances of qualifying for a mortgage.
Every lender has their minimum credit score, so instead of feeling discouraged, the best thing to do is to shop around for the best mortgage rates in Guilford. But first, know where you stand by getting a free annual report to check for any unresolved issues or even errors. So that you can attract the best rates, once you know your credit score, start working on raising it.
Myth #2: The asking price is set in stone
Buying a house is so much more like buying a car. The offer you make doesn’t need to be the asking price. If you have a down payment ready to go, pre-approval and stellar credit, the seller might be more willing to negotiate than wait for another buyer to come around. Plus, if you identify some issues during the home inspection, you could always use these in your negotiations.
Myth #3: Your down payment must be 20%
Ideally, a down payment of 20% will help you avoid the pesky mortgage insurance otherwise known as PMI. However, many lenders will gladly offer mortgages with only a 5% down payment, so long as you’ll be willing to foot the monthly bill for PMI.
The process of home buying can be daunting especially if you have more misleading information floating around in circles. Once you sieve the myths, you’ll have accurate information to work with, making the process less taxing.