5 Most Common Myths About Buying a Home - Reality Bites!
- Posted By Shiral Alexander
Buying a home is probably the biggest investment most of us will ever make, so it’s no surprise that it comes with a fair amount of stress and uncertainty. From fears about how much deposit we need to where we can find the best mortgage deals, there’s a lot to take into account before hitting the housing market. However, because there are so many different factors to take into account when buying a home, myths about home buying are fairly common – some being slightly exaggerated, and others not quite accurate. Whether you’re looking to buy your first home or simply want to brush up on some insider information before making an offer on your current residence, check out our list of the most common myths about buying a home, debunked:
The Biggest Myths About Buying a Home
Myth #1: The Mortgage is the Largest Commitment When Buying a Home - While securing the mortgage loan is likely to be the largest commitment you make when purchasing a home, there are several other things to factor in before taking the leap. From stamp duty to legal fees and moving expenses, not to mention the cost of setting up utilities at your new address, owning a home is not cheap!
Myth #2: Property Values Always Go Up - In most major cities, property values do tend to go up, but this isn’t always the case. It’s important to note that it’s not the value of the home itself that goes up, but rather the amount that the value of the home is appraised at. If a property is in an up-and-coming area, the value of that property is likely to go up, but if it’s in a less desirable part of town, it may not even be worth selling.
Myth #3: Title Insurance is Only for the Rich - If a home buyer can’t or won’t trace their property’s chain of title back to the original owner, they should definitely get title insurance. However, there are people who believe that only rich people can afford title insurance, which isn’t true at all. In fact, even home buyers who have traced the chain of title back to the original owner can purchase title insurance. What title insurance does is provide coverage if someone later comes forward and claims they have a better title to the property than the homeowner has. It’s a small added cost that can protect you against a big loss if someone later claims they have a better title to the property than you do.
Myth #4: An Agent Will Find You the Best Deals and Properties - While it’s true that real estate agents will often send you information on the latest properties that they think would be a good fit for you, they aren’t obligated to send you the best properties. They are, however, obligated to find you the best deal. Agents are paid by the seller, not the buyer, so it’s in their best interest to get you to pay as much as you can for the property, not to find you the best deal.
Myth #5: Knowing Your Credit Score Is Important When Buying a Home - While it’s true that knowing your credit score is important when buying a home, what’s even more important is knowing your debt to income (DTI) ratio. Your credit score is used by many lenders to determine what type of mortgage you qualify for, but it’s not used to determine how much you can spend on a home. Your DTI ratio, on the other hand, is used to determine how much you can spend on a home.
Conclusion
Buying a home is a big life decision, so it’s important to do your research before you pull the trigger. From finding out how much you can spend on a home to learning how to interpret your credit score, there’s a lot of information you need to take into account. Hopefully, this list of the most common myths about buying a home, debunked, will help you make the right decision when it comes to buying your dream home!
Author: Shiral Alexander