First Time Homebuyer Myths

Buy your first homeBefore you buy your first home or begin looking for homes for sale in Portland, be aware of the first time buyer myths that are often perpetuated. Buying a home is one of the biggest, if not the biggest, financial transactions of your life, so making sure you have accurate information to guide you is essential. 

We are here to help, so contact us any time to learn more about buying a home in the Portland metro area. To make a confident investment, you need to be armed with accurate information, so check out this list of common first time homebuyer myths to learn more.

Myth: You Need a Perfect Credit Score

While having a good credit score is important for securing favorable mortgage terms, you don't necessarily need a perfect credit score to buy a home. Instead, loan programs accept credit scores within a certain range. It's a good idea to review your credit report, address any issues, and work towards improving your credit score, but don't let the myth of perfection discourage you from exploring your home-buying options.

If your score is 620 or higher, you may be able to qualify for a mortgage with better terms than you expect. Depending on the loan, many people with just "good enough" are able to buy their first home. Before assuming you can't qualify, talk with a few lenders to find out what your options might be. 

Myth: You Need a Large Down Payment

Saving for a 20% down payment is unrealistic for many first time buyers, and waiting to have this major savings is holding some people back from learning more about buying a home. The belief that you need a substantial down payment, typically 20%, is a common misconception.

While a larger down payment can offer benefits such as lower monthly payments and reduced interest costs, there are mortgage programs that allow for lower down payments. FHA loans, for example, may require as little as 3.5% down. It's essential to explore various loan options and understand that flexibility exists in terms of down payment requirements.

Myth: It's Cheaper to Rent than to Buy

The assumption that renting is always cheaper than buying is not universally true. In many cases, monthly mortgage payments can be comparable to or even lower than rental costs for a similar home. Additionally, homeownership builds equity, while rent payments typically do not offer the same long-term financial benefits. It's essential to consider individual circumstances, such as local real estate market conditions and long-term financial goals, when deciding between renting and buying, but do not assume that renting is the less expensive choice.

Myth: You Can Skip the Home Inspection

In your excitement to buy a home, you may be looking for ways to make your offer more attractive, like offering to waive the home inspection. Skipping a home inspection is a risky decision. Some buyers may believe they can save money or expedite the process by forgoing an inspection. However, a home inspection is a crucial step in identifying potential issues with the property. It provides valuable information that can influence your decision-making and negotiation process. Investing in a thorough home inspection can save you from unforeseen problems and expenses down the line.

Myth: It's Good to Look at Homes First Before Applying for a Mortgage

You may think going to open houses and getting an idea of what's on the market is a great first step. While it can be fun to see what's out there, it actually doesn't make sense to start the house hunting process without first pursuing mortgage pre-approval.

Many buyers, and first time buyers in particular, do not actually know what their budget will be despite doing their own calculations. Obtaining a mortgage pre-approval is a crucial step in the home-buying process. It provides a clear understanding of your budget, strengthens your negotiating position, and streamlines the purchasing process. Sellers often prefer buyers with pre-approvals as it demonstrates serious intent and financial readiness. Skipping this step may put you at a disadvantage in a competitive real estate market, or lead you to end up wasting time and riding an emotional roller coaster.

Myth: The Perfect Home is Out There

While you should have a clear idea of your must-haves and deal-breakers, the idea of finding a perfect home that meets every desire is a myth. Compromises are often necessary, and it's essential to prioritize features based on your needs and lifestyle. Be open to possibilities and consider the potential for future improvements or personalization.

Ready to look for homes for sale in Portland? Contact us any time.

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