Buying a home isn’t like buying a pair of shoes – it is a huge investment. When you are set to buy a new home, you would hear a lot of advice and opinions from your friends and family. However, all these opinions and suggestions are not always true. There are many myths that people still believe to be true and also love to share with others.
In this article, I will discuss those myths about buying a new house that you shouldn’t pay any heed to.
Top 4 Myths About Buying a New House
1. The Down Payment is 20% of the Total Cost
While you discussed buying a house with your friends and family, you surely have heard that you have to pay 20% of the total cost of the house as a down payment to get an approval for the mortgage. Even though it used to be true in the past, in more recent years, the scenario has changed and now the down payment rule is different. Now getting FHA loans are even easier and allow homeowners to pay just 10% as a down payment if their credit is not less than 500.
On the other hand, if you have a credit score of more than 580, then you can pay 3.5% for the down payment. Isn’t it awesome?
2. You Don’t Need a Real Estate Agent
The most common myth you will hear is you don’t need a real estate agent to find and buy the perfect home. The role of a realtor is extremely important in buying a new home – with his expertise, he will help you to score the best house at the lowest possible price and therefore, you just cannot afford to not hire one.
Even though the realtor’s fee is about 3% on an average, it is paid by the seller and often built into the final price. So, even when you don’t get a buying agent, you are still paying for it.
3. It’s Cheaper to Rent than to Buy
You have obviously heard that you should rent a house instead of buying one as the buying process comes with a lot of hassle. Even though it’s true that buying a new home is a lot of work, renting is cheaper than buying is a complete myth. With the rents skyrocketing in recent years, the average cost of renting is somewhat similar to the mortgage payment, and hence, investing in a new home rather than renting is a better idea.
4. You Can Avoid Home Inspection on Newer Homes
Another common thought that has been circulating for years is that if the house is new, you can avoid inspecting it. It’s a complete myth; even home builders can make mistakes and if you don’t inspect it, the seller probably would never disclose it to you. Moreover, without visiting the house, how would you know if it suits your vibe or not. Even though a home inspection would cost you around $300 to $400, trust me, it’s totally worth your money.0