15 Home-Buying Myths You Need the Facts on

Prospective home buyers have a wealth of information at their fingertips before they even speak to a real estate agent. Friends, family and social media offer plenty of advice, though some may be outdated or not applicable to individual situations. Based on responses and insights from real estate experts, here are 15 myths and the truths behind them to guide you correctly.

Myth #1: A 20% down payment is required

Fact: A 20% down payment hasn’t been necessary for decades.

The most common question loan officers receive is about the required down payment. Many loans allow for as little as 3% down if the loan amount is below the “conforming” limit, which is $766,550 for most counties as of 2024. However, putting down less than 20% typically requires paying private mortgage insurance. HUD/FHA loans allow a minimum down payment of 3.5%, USDA/RD loans often require no down payment, and VA loans for military members allow 0% down. Always check with your lender for specific guidelines.

Myth #2: Your pre-approval rate is the rate you’ll get at closing

Fact: Interest rates change daily. The rate quoted during pre-approval reflects current market conditions and personal factors like loan amount, credit score, property type and location. Rates are only “locked in” once you find a home and sign a purchase contract.
Pro Tip: Take advantage of Howard Hanna’s Rate Reducer and Lock & Shop mortgage programs to secure your mortgage rate before closing.

Myth #3: Wait to buy until home prices drop

Fact: Waiting for prices to fall carries risks. Prices might not decrease in many areas due to sufficient buyer demand and limited home supply. If you can afford a home that suits your long-term needs, it’s worth considering buying now.

Myth #4: Buying is always cheaper and a better investment than renting

Fact: Depending on location, renting can be cheaper than buying, and home values don’t always increase consistently. While owning a home can provide asset appreciation and stable monthly costs, renting might be financially advantageous in some areas.

Myth #5: Find a home before applying for a loan

Fact: It’s smart to get pre-qualified or pre-approved for a loan before house hunting. This way, you know your budget and won’t fall for homes outside your price range.

Myth #6: Buying a fixer-upper saves money

Fact: True fixer-uppers often require extensive and costly repairs. You should get quotes for necessary work beforehand and be prepared for potential hidden issues. While you may love the finished home, the process can be expensive and time-consuming.

Myth #7: You must use the lender who pre-approved you

Fact: You can shop around for lenders even after pre-approval. However, changing lenders after going under contract can cause delays and complications, so it’s best to finalize your choice beforehand.

Myth #8: Wait to buy until you can afford your ‘forever’ home

Fact: Waiting to buy your ideal home might mean never buying at all. In some markets, buying a starter home and building equity can be a better strategy, even with higher mortgage rates.

Myth #9: A 30-year fixed-rate mortgage is always best

Fact: Adjustable-rate mortgages (ARMs) can save money over time, especially if rates drop. ARMs start with a fixed-rate period, and then adjust, offering potentially lower rates.

Myth #10: You can’t buy a home with student loans

Fact: Student loans are just another part of your debt-to-income ratio. They can help or hurt, depending on your payment history and overall financial picture, but many people manage to buy homes with student loans.

Myth #11: You must pay the asking price to buy a home

Fact: The asking price is negotiable. Home prices are typically settled through offers and counter-offers. Use comparable sales data to guide your offer.

Myth #12: Excellent credit is needed to buy a home

Fact: Good loans and rates are available for those with less-than-perfect credit. Establishing and using credit responsibly is key to qualifying for a mortgage.

Myth #13: Fall and winter are bad times to buy a home

Fact: These seasons can be great times to buy, as there may be less competition. Spring is popular, but not necessarily better for getting a good deal.

Myth #14: Self-employed individuals can’t buy homes

Fact: Self-employed people can buy homes but may need to provide more documentation of income. Lenders look for steady, reliable income over time.

Myth #15: All lenders are the same

Fact: Lenders vary in terms of rates, fees, customer service and the ability to close on time. Shopping around is crucial to finding the right lender for your needs.

Understanding these myths and facts can help you navigate the home-buying process more confidently and make informed decisions.

 

12 Popular Interior Design Styles

Interior design is truly the most unique art form. With a room as your blank canvas, the possibilities are endless. Whether you are looking for a home makeover or a slight refresher, we are here to help you find some inspiration for your next work of art.

Art Deco

Art Deco is both modern and glamorous while paying an ode to many different influences across time. Inspiration for Art Deco design comes from the American Roaring ’20s, the French Enlightenment and ancient Egyptian art. These influences can be seen in the maximalism and extravagance of Art Deco design. Here are some ways you can incorporate Art Deco design to give your house that luxurious look:

  • Geometric shapes and patterns
  • Rich materials and textures- lacquered surfaces, brass, gold, velvets, mirrors or glass
  • Statement lighting- chandeliers and scones (yellow tones and moody)
  • Jewel tones and statement colors
  • Exotic/mural wallpapers