Buying a home is a huge commitment and one which should be considered carefully before undertaking. Not only are you committing to years of the mortgage, but you are also putting down roots in a community for some period of time. As more and more Millennials consider the pros and cons of buying their first home, they are often confronted with a barrage of information containing half-truths and outright lies. Here are 2 common myths which cause my potential buyers to hold off buying a home.
Myth #1 – You have to have a 20% down payment.
While it’s true that most 0% down loans have disappeared after the mortgage meltdown last decade, it’s also true that there are some very attractive loan options which do not require a 20% down payment. Although loans with less than an 80% loan-to-value do require private mortgage insurance, which add cost to the monthly payment, there are many options available with a lower down payment; many lenders offer conventional loans with as little as 5-10% needed for the down payment.
Myth #2 – You need great credit
While it is certainly helpful to have a great credit, there are loan programs available for buyers will lower scores. If you have any concerns that your credit score might be too low, talk to your mortgage broker about your options, and what type of lenders may be available to you.
The main point is that buying a home is a great investment in your future, both financially and personally. Before you assume you aren’t ready to buy a home, talk with a lender and learn your options. Don’t let these myths keep you from a new home.