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5 Common Myths About Buying Your First Home

Written by Posted On Monday, 10 September 2018 13:41
5 Common Myths About Buying Your First Home

The truth about buying your first home will often await beneath a thick layer of myths, misunderstandings and anecdotal “facts” passed along by well-meaning friends, coworkers and loved ones. Understanding this complex, often stressful process as clearly as possible before entering it promotes making the most informed decisions possible while eliminating opportunities for anyone to talk you into a raw deal. Therein lie the challenges to even the wariest consumers. Who do you trust? What questions should you ask at every turn? How do you know when someone has given you the whole truth and nothing but the truth? 


The answers are not always simple. Many conditions are subject to change and negotiation. One insurmountable sticking point can send an otherwise surefire purchase falling through the cracks. Dispelling these five common myths about buying your first home serves as a confidence-boosting start to assisting in each stage as productively as possible. 


Pre-approval Guarantees A Mortgage
No way. At best, mortgage pre-approval signifies your apparent creditworthiness as defined by at least one potential lender’s initial background check. Based on a general portrait of your personal finances, an institution forecasts a mortgage product and amount for which you could realistically qualify. That vote of confidence may ensure sellers you are a serious buyer with the legitimate means to see a sale through, rest assured your credit score and financial records have not yet passed detailed enough scrutiny to guarantee a loan. 

There’s a reason full approval awaits only toward the end of the home buying process: a lot can change in as little as a month or two. People lose jobs. Income and assets suddenly swing downward. Buyers opt for properties far outside their initial price ranges and make reckless spending or consumer credit application decisions. Any or all of the above can diminish a would-be borrower from glowing candidate to untouchable liability. 


Home Inspections For Newer Homes Are Unnecessary
This one pops up every so often as a means of lulling apparently enthusiastic-but-cautious buyers into a fast sale. Be especially guarded amidst a hot housing market. After all, someone may tell you, anyone could come along and sweep that dream home from under your nose in half a heartbeat simply by waiving a home inspection. 

If such a seller balks at a routine inspection, let it go and move on to your next property. Passing up an inspection means you agree to purchase the home as is and assume financial responsibility for every accompanying problem, including issues not immediately apparent to a naked, untrained eye. The long-term consequences far outweigh the immediate extra cost of requesting a thorough inspection. Spend a little more money now instead of a potential fortune spread over countless years. 


Nobody Really Needs A Real Estate Agent Anymore
Yes, you do. Homebuyers do not even pay a real estate agent’s standard 3-percent commission. That is woven into the selling price and paid by the seller, who no doubt has been told to expect to pay the buyer’s agent fee. Shopping without an agent will not automatically reduce the price just because there is suddenly one less person the seller has to pay. Meanwhile, you miss out on a professional trained to leverage comparables and personal expertise toward securing the lowest possible purchase price and thoroughly assess lengthy, complicated contracts. An attentive agent addresses appraisals, inspections, opt-out clauses and other considerations precisely because the average consumer can quickly drown in subtle and potentially costly details. Shopping without a realtor wastes vastly more money, time and stress than you might convince yourself going it alone will save you. 


To Really Save Money, Buy A Fixer-Upper
A string of home-improvement shows has made rehabbing an eyesore home seem far cheaper and easier than any first-time homebuyer should ever believe such a process to be. Rewarding? Sure, if you know exactly what you are getting into and have the cash to throw into such a patience-taxing labor of love. Those who base their decision on the romanticized renovations seen on television often quickly realize just how difficult and expensive tearing down walls and rebuilding kitchens and bathrooms will almost always become. Others always aspire to tackle such upgrades themselves, but the money and time never fully materializes. In the end, they accept a sub-optimal home and quickly look to start the buying process all over again - hopefully, a bit wiser. 


There Is Never Any Better Investment Than Buying A Home
Previous generations have no doubt told you that no investment delivers more rewarding long-term returns than owning a home. While ownership certainly can have its considerable financial benefits, no investment is ever guaranteed. Over the last 126 years, U.S. house prices have only increased by around 0.37 percent annually. Any value gained exceeds gaining absolutely no returns from renting, value appreciation alone is only one variable demanding consideration. Like any purchase, our ultimate derived value will vary according to your local market housing prices. Think of that both in terms of how long it will take for your home to increase in value equivalent to what you paid for it. 

Along the same lines, do you even plan to live in it that long? What will a mortgage payment set you back each month compared with your current rent? Can you afford ongoing maintenance, repairs and homeowners insurance? What is your contingency plan if a housing bubble should burst at an inopportune point in your mortgage? 


Buying a home entails a life-changing personal and financial commitment. A knowledgeable mortgage broker has every incentive to provide the clearest information possible to these queries and countless more, thanks to an irrevocably vested interest in helping you purchase the home you love with financing you can afford. The more you know about the journey toward becoming a first-time homebuyer, the greater the assistance you can provide every professional networking on your behalf throughout the process. The only “bad” question is one you avoid asking when the answer could save you thousands of dollars or more.

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Lizzie Weakley

 About the Author: Lizzie Weakley is a freelance writer from Columbus, Ohio. She went to college at The Ohio State University where she studied communications. In her free time, she enjoys the outdoors and long walks in the park with her 3-year-old husky Snowball.

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