Purchasing a home can feel like an overwhelming undertaking. For some, it may be the better choice over the rental market, but the comfort in renting keeps them staying put. Fees, credit, and the ability to fallback on the landlord for repairs seemingly makes things easier, but knowing some key facts can make home buying seem like your dream come true.
Myth #1) Renting is cheaper than buying
This is one of the most commonly expressed concerns for potential homebuyers.
Although there may be more upfront costs when purchasing a home; down payment, closing costs, etc., however, over time, renting can end up taking more value out of your pocket. If you are looking for a place to live, a competitive rental market may drive up the prices, and mixed with low mortgage rates for home loans plus potential tax savings, your monthly mortgage can end up substantially less that paying rent. The mortgage you are paying each month is invested into the property. Also, oftentimes, you may experience an appreciation in the value of your home when it comes time to sell.
Myth #2) Maintenance costs can be stifling
Yes, your home will experience wear and tear. This is totally normal, and something to plan for. The thing about owning a home is, you have to be prepared and equipped to pay for pretty costly items or services every once in a while. If you are able to do that, home ownership can definitely work in your favor. It’s estimated that over a 10-year period, home owners will pay an average $100-200 per month for repairs and maintenance. So for example, if average rent in your area is $2,000, yet you’re able to obtain a monthly mortgage amount of $1500, you can see the obvious costs savings there…about $300-400/month.
Myth #3) You need 20% for a down payment
If you’re in the market where a home your desired size may cost $550,000, coming up with enough for a down payment may seem like a laughable thought. However, many think you have to meet the mark of 20% down. For a home at that cost, that would mean $110,000. Let’s explore this common 20% down myth. Although the national average for a down payment usually falls between 10-20%, it’s not a requirement. The amount asked for a down payment is decided by several different factors: FICO score, borrowing history, the lender’s standards and procedures, the current housing market, and even the house itself. A down payment may also be lowered if the homebuyer qualifies for a VA or FHA loan which allows for as little as 0-3.5% down.
Myth #4) Your credit score isn’t good enough
Ever since the home loan meltdown of 2008, there has been a nasty myth circling around, the myth that your credit score isn’t good enough to qualify for a home loan.
Typically, you’re somewhat good to go as long as your credit score sits at 650 or higher. Not quite there? Look to an FHA loan – these are loans offered through lenders approved by the Federal Housing Administration. It is likely that even with a score as low at 580, you can gain approval. Even lower? According to the U.S. Department of Housing and Urban Development (houses the FHA), as long as you can come up with a 10% down payment, you may qualify for a loan with a credit score as low as 500.
Myth #5) It just seems so much easier to rent…why is buying worth it?
What makes a DeNova home worth the effort of qualifying for a home loan?
DeNova is a privately held, builder owned company. Business to them is personal and heartfelt. Every family that purchases a home is considered to be part of the DeNova Family of Home Owners. Being privately held, things are handled with efficiency, nimbleness, and thoughtfully. Every community is planned to be a perfect fit into the surrounding area and landscape. Each detail and upgrade, every appliance and fixture is brand new and crafted with care. DeNova aims to offer more than a home, but a haven in which memories are made.
To check out all of our wonderful DeNova communities, please visit http://www.denovahomes.com/neighborhoods/
For financial planning and to get pre-approved for your brand new home, talk with
Laurie O’Callaghan at Wells Fargo Home Mortgage. Find further info here http://www.denovahomes.com/buying-your-home/financing/