Misconceptions About Buying a Home
Buying your first house can be both exciting and overwhelming at the same time. Exciting because you’re finally realizing your dream of homeownership. Overwhelming, well, because you’ve somehow heard that there are too many things you have to deal with when buying your own home. While it can be confusing, especially if it’s your first time, don’t worry, this post is written to help you deal with the inaccuracies and common misconceptions in buying a new home.
You Need A Pristine Credit Score
If your credit score took a downturn, it doesn’t mean that you’re no longer eligible for homeownership. While loan application requirements are tighter these days, banks actually take more into consideration than just your credit score. Banks will be looking into your income, debts, assets, and employment history. So having a bad credit score doesn’t necessarily mean that your application will be automatically turned down, though you might have to pay a larger down payment. You can also explain your credit history. If you’ve been dealing with hefty student loans or late medical bills, let them know.
Having Your Own Home is a Guaranteed Investment
If you’re planning to buy a home for investment purposes because you’ve heard about it being a great investment, then you need a reality check. Having a house is not the cash cow that many people think. You may need to wait for at least five to ten years for a total return of investment, and of course, that will differ with how much you actually pay for the home and the amount of money you put down.
Rent Will Always be Cheaper Than It Is To Buy
There’s always this one friend who will prefer buying over renting. Or renting over buying. Whichever way you would want to put it, the buying vs. renting debate, in my opinion, is pretty much pointless. Not only does it ignore the enormous grey area between the two options, but this debate somehow manages to downplay the fact that each of us has his/her own preferences.
Buying or renting has its own pros and cons but at the end of the day, it will all boil down to your lifestyle and personal preferences.
Buying a House That Needs Renovation is Cheaper
You might have seen a lot of the TV show Property Brothers lately. Now you’re inspired to buy that fixer-upper. Imagine snagging that rundown place located in a good neighborhood for cheap. You probably thought, why not just invest some time and money renovating the place? You’ll be transforming that ugly rundown shack into your brand new dream home (worth at least twice what you originally paid) in no time. Well, unfortunately, while it may sound like a plan, it rarely happens in reality. Tearing down the walls and completely redoing the kitchen/dining/living room can be much more expensive and difficult than what we see on TV.
Schools Don’t Matter If You Don’t Have Kids
The presence of schools in the area won’t matter if you don’t have kids, right? But the kind of neighborhood that you will be choosing matters. Later on, if ever you decide to sell your property, even if you don’t have kids, a good school in the area is a sign of a that the neighborhood is good and family friendly.