Purchasing a home in Southwest Missouri can be an exciting yet overwhelming experience, especially if you’re a first-time buyer. In the midst of the excitement, it’s crucial to separate fact from fiction when it comes to common home-buying myths. Let’s expose some of these misconceptions using helpful and straightforward information.
1. Applying with different lenders will hurt your credit
While it’s true that multiple hard inquiries can affect your credit score, most credit scoring models recognize rate shopping for mortgages. When done within a short timeframe, multiple inquiries for the same type of loan are treated as a single inquiry. So, we encourage you to shop around for the best mortgage rates.
2. You should wait until home prices drop to purchase
Predicting the housing market is like trying to predict the weather – it’s notoriously unpredictable. While waiting for prices to drop might seem like a good strategy, you could miss out on other factors like rising interest rates or increased competition. Instead of timing the market, focus on finding a home that meets your needs and budget.
3. You should find a home before applying for a loan
Getting pre-approved for a mortgage before house hunting can give you a clear understanding of your budget and strengthen your position as a buyer. It will also show sellers that you’re serious and financially capable, which can give you an edge in competitive markets. There is nothing worse than falling in love with a home that is out of your budget.
4. You need a 20% down payment
While a 20% down payment can help you avoid private mortgage insurance (PMI) and secure better loan terms, many lenders offer programs that allow for lower down payments. FHA loans, for example, can require as little as 3.5% down. Connecting with a good lender will help educate you about down payment options and the best strategy for your situation.
5. You should just wait until you find you can afford your forever home
The idea of a “forever home” can be enticing, but it’s not always practical or necessary, especially for first-time buyers. Your first home doesn’t have to be your last – it’s okay to start with something smaller or less expensive and work your way up as your needs and financial situation evolve. In fact, you will most likely be building equity that you can use towards your “forever home.”
6. You need perfect credit to buy a home
While having excellent credit can certainly help you qualify for better loan terms, it’s not necessarily a requirement for buying a home. There are loan programs available for borrowers with less-than-perfect credit, although they may come with higher interest rates or require a larger down payment. Consulting with a mortgage advisor can help you understand your options based on your credit situation.
7. You have to pay the asking price
The asking price is just that – a starting point for negotiations. In some cases, sellers may list their homes slightly above what they’re willing to accept, expecting buyers to make an offer. When you connect with a Gideon Valley Real Estate agent, they will be staying on top of what is going on in the market and pulling comparable properties when you find a home that you are wanting to make an offer on.
For expert guidance in your home buying journey, reach out to The #KodySoldMyHome Team at ReeceNichols Real Estate. Serving Springfield, MO and Branson, MO, our skilled agents, led by Kody Gideon and Victoria Billington, will support you at every stage, ensuring your real estate goals are achieved. If you enjoyed this blog, you may also enjoy our blog, Ideas to Save For a Down Payment.