Homebuying Tricks & Treats: Creepin’ it Real
Dying to jump into the market but finding home buying horror stories and misconceptions are haunting you? With Halloween right around the corner, we’re addressing some common ghost stories and laying out what’s a true treat vs. a false trick. Let’s get to the thrills and chills, shall we?
The lowest initial interest rate is always the best… FALSE!
While a lower interest rate generally equates to a lower monthly payment, you should never base your decision solely on rate. For example, adjustable-rate mortgages (ARMs) commonly feature a lower rate than fixed-rate mortgages. But when you choose an adjustable-rate mortgage, over time the rate can fluctuate… Eek that can be spooky! Your interest rate and monthly payment could increase. Most home buyers feel more secure choosing a fixed-rate mortgage. This type of loan allows for a consistent payment and rate for the life of your loan. An ARM could definitely be the loan that best suits your financial plan, but don’t chase one solely because of the interest rate.
It’s dream home or bust… Hold out until the house checks absolutely every box… FALSE!
While we’re not suggesting you settle for a house that doesn’t suit you at all… Keep in mind that over time you can make updates to your home. Buying a home with all the features you desire might not be in the budget at this point, but that’s okay! Look for a home that checks off most of the need boxes and has room to add the wants.
Your down payment can be as little as 0% to 3%… TRUE!
One of the biggest misconceptions about obtaining a home loan, is that you need to put down 20% of the home’s purchase price. In reality, you can find scary low down payment options these days. There are many loan programs that allow for lower down payment amounts like an FHA loan, VA and USDA loans, even Conventional loans. All of these products offer options between 0% – 5% down. If a down payment is what’s spooking you, get connected to one of our Cambria Mortgage professionals sooner than later! They’ll give you the facts and help you prepare to save for that down payment as well as looking at options for down payment assistance.
Getting pre-qualified for a mortgage and getting pre-approved for a mortgage are the same thing… FALSE!
There’s a key difference between a pre-qualification and a pre-approval… A pre-qualification is merely an estimate while a pre-approval shows you’re a credible and serious buyer. Getting pre-approved with Cambria Mortgage means a mortgage professional on our team has taken a deep dive into your financial situation and you know with certainty how much home you can afford. This shows the seller you’ve taken the time to really prepare yourself for homeownership and your offer is reliable. This should be your first step to home buying!
Real estate agents are necessary… TRUE!
In the age of instant-access, it’s tempting to think you’ve got this house hunting thing handled all on your own. While you may be able to spot listings you want to tour online, a good real estate agent will assist you in finding homes that fit your budget, help you make offers and negotiations, provide off-line listings you wouldn’t find on Zillow and much more. Trust us on this one, you’re better off with the help of a real estate agent. If you have never worked with an agent before and don’t know how to locate one, our team is happy to connect you with some agents we have worked with in the past.
It’s a good time to buy, even though we’re outside of peak real estate season… TRUE!
While it is well known that spring and summer are the most active times for home buyers and sellers, that doesn’t mean it is necessarily the only right time to buy a home. Buying a home when the market slows in the fall and winter could potentially save you money because there is generally less competition in the market. This also means that home prices should be more reasonable than in a peak market.
What you’re pre-qualified for is how much you should spend… FALSE!
A mortgage lender on our team will determine how much you qualify for based on a variety of things like your income, assets and credit score… But that’s just a number on paper. It’s important to really take into consideration how your potential new mortgage payment can affect your day-to-day spending. We recommend living with that potential new payment for a few months so you get a true sense of how much you really want to spend before you actually make the commitment. Every month set aside that specific dollar amount. If this new payment amount doesn’t phase you much, then great! You’re in the clear and should feel confident that you are comfortable with that new payment.
We hope we’ve cleared the spooky cobwebs surrounding home buying for you. Cambria Mortgage is here to keep you out of the dark during your home financing adventure. We’re just a call or click away! Visit CambriaMortgage.com or call 952-942-0110 to get started today.
Immergut, D. (2020, June 17). 11 Myths Homebuyers Should Never Believe. Retrieved October 27, 2020, from https://www.bobvila.com/slideshow/11-myths-homebuyers-should-never-believe-50955
Markert, J. (2020, March 19). Story from Rocket Mortgage: These 7 myths about buying a home are overdue for correction. Retrieved October 27, 2020, from https://www.usatoday.com/story/sponsor-story/rocket-mortgage/2019/05/16/these-7-myths-buying-home-overdue-correction/3695548002/
Marquit, M. (2019, September 24). 8 Common and Costly Homebuying Myths. Retrieved October 27, 2020, from https://www.moneytalksnews.com/homebuying-myths/