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You Can Buy A Home, Even If You Think You Can't

7 August 2020

Cody Day

There's No Place Like Home 

Space, privacy, and freedom are huge benefits to owning your own single-family home. A huge part of the "American dream" is homeownership and 80% of Americans say that they'd prefer to live in a single-family home. However, many people think this dream is not easily achieved and may even be impossible for them. What is stopping them from achieving this goal? There are huge misconceptions regarding homeownership that stem from outdated views of the home buying process. 

Myth #1: You Need to Have 20% of the Purchase Price in Cash to Buy a House

Busted: There are home loans for every budget. While you can avoid paying PMI (Private Mortgage Insurance) by putting a large sum down on your house, it is certainly not required in order to purchase a family home. Using an online mortgage calculator, you can see the estimated cost of PMI. For example, on a $150,000 house, you might pay an extra $200 to $300 each month in PMI instead of paying $30,000 down when you buy your house. Paying a little more each month instead of saving up until you have tens of thousands of dollars for a down payment is much easier to do for most Americans.

Myth #2: A Perfect Credit Score Is Required to Buy a Home

Busted: Credit Karma reports that the average credit score for first time home buyers in the United States is 684. This is the average, meaning that there are people buying homes on either end of the credit spectrum. In fact, some loans accept individuals with credit scores under 600. While it is beneficial to have a higher credit score so that you are approved for a lower interest rate and therefore a lower monthly payment, this is also not a requirement to buy a home. 

Myth #3: Buying a House Is More Expensive than Renting

Busted: While homeowners may be faced with unexpected costs such as repairs and home maintenance costs, there are also financial benefits to homeownership. The average cost of rent in 2018 was $1,588 in the U.S. Over the course of a year, a renter pays nearly $20,000 in rent and does not earn anything out of the transaction. If you start with a moderate-sized family home, monthly costs can be far lower than this average rent cost. In addition, even if the cost of your mortgage was exactly the same as the cost of rent, you would see some of that money back when it came time to sell your home, unlike renters who say goodbye to their rent, and often their security deposit, when they move out. 

Now is an excellent time to purchase a family home because mortgage rates are lower than ever. It's time to make your American dream a reality. For more information about family homes in your area, contact a real estate agent today.

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