June is National Homeownership Month, which is dedicated toward raising awareness and access for first-time homebuyers to transition into homeowners. Buying a home for the first time is a huge step and requires plenty of preparation and organization, however, many believe that they might not be ready or eligible to buy a home when they might just be! We’re busting four common myths that people believe they need in order to become a homeowner.
Myth #1: You Need 20% for a Down Payment
It’s been commonly believed that you need to save at least 20% of the home price you want to purchase in order to get a mortgage, but that’s far from the truth! While yes, the more you are able to put down the lower your monthly mortgage payment will be, it does not mean you need to save or even put down that high of a percentage. In today’s economy, there are even ways to put 0% down or as little as 3.5% down. That means you may not have to have as large of a savings as you thought.
Myth #2: Interest Rates are Too High
It is true that mortgage interest rates have been on an upward trend over the past year, but just as you can shop for a home, you can shop for a mortgage lender! Many lenders, such as Lennar Mortgage, offer special financing with lower-than-market interest rates attached! Plus, if rates go down you can always refinance down the line. Additionally, it’s much assured that when rates go down, competition goes up and prices are likely to rise.
Myth #3: You Must Have Perfect Credit
Another common misconception is that you need to have a near perfect credit score in order to qualify for a mortgage. But the reality is that a lender takes a variety of credit scores into consideration, plus there are still loan options and programs for people with lower or less-than-perfect credit. The best way to figure out your options? Reach out to a lender, such as Lennar Mortgage’s Homebuying Solutions Group, to start working on your credit score. Homeownership may be closer than you think!
Myth #4: Renting is Cheaper than Buying
One of the most common reasons people rent for so long is they believe it’s simply cheaper than the cost of buying and owning a home. While it may appear that way in the short term, that misconception overlooks the advantages of building equity and long-term financial gains that are often associated with homeownership. When you rent, you are paying a landlord each month. When you own, you are paying into you own mortgage, opening the possibility to gain equity over time. Plus, rents rise – your mortgage, if at a fixed rate, will most likely stay about the same.
