Buying a home can feel exciting but also confusing, especially with so much information floating around. You might hear advice that sounds helpful but could actually make the process more difficult than it needs to be.
Understanding common myths about homeownership can save you time, money, and frustration down the road. By knowing what to watch out for, you’ll be better prepared to make decisions that truly fit your situation.
Renting is always cheaper than owning
You might think renting is always the cheaper choice, especially because upfront costs are usually lower. However, this doesn’t tell the whole story.
When you buy a home, your monthly payments build equity over time. Renting, on the other hand, means paying without gaining ownership or investment value.
In some places, renting can be less expensive, particularly if home prices or interest rates are high. But if you plan to stay long term, owning often makes more financial sense.
You need a 20% down payment to buy a home
You don’t always need to put 20% down to buy a home. Many loan programs allow you to put down as little as 0% to 3.5%. This can make homeownership more accessible, especially if you’re buying your first home.
While a larger down payment can lower your monthly payments, it’s not a strict requirement. The idea that 20% is necessary is a common myth that might hold you back.
It’s worth exploring different loan options to see what fits your budget and goals. You can still buy a home with less money upfront than you might think.
Perfect credit score is required for a mortgage
You don’t need a perfect credit score to get approved for a mortgage. Many lenders offer options even if your credit has some bumps. A credit score in the 600s can often qualify you for a loan.
Your income, job stability, and debt-to-income ratio also play important roles. So, don’t let the idea of needing an 850 credit score stop you from applying. You might be closer to owning a home than you think.
Home maintenance costs are minimal
You might think home maintenance costs are small and easy to manage. In reality, they can add up quickly and surprise you.
Regular upkeep like HVAC servicing, roof repairs, or plumbing checks aren’t cheap but are necessary. Skipping them can mean bigger bills later.
It’s important to budget for maintenance as part of your homeownership. Expect expenses beyond just the mortgage to keep your home in good shape.
Eliminating all debt before buying is necessary
You don’t have to pay off every bit of debt before buying a home. While reducing what you owe can improve your financial picture, completely eliminating debt might stretch your savings too thin.
Keeping some funds for your down payment and emergencies is important. It’s about balancing your debt and your ability to cover homeownership costs.
Lenders look at your overall financial health, not just whether you have zero debt. Managing debt wisely can work in your favor when you apply for a mortgage.