Have you been considering buying a house, but think you don’t have the funds for it? You may be better off than you realize. Let’s break down these eight common myths about making a down payment for starters.
Down payment help is only for first-time buyers.
The good news here is by The Department of Housing and Urban Development’s own definition: first-time buyer means you have not owned a home in three years.
Down payment programs make it hard.
Did you know you can take homeowner education courses? In fact, doing so may put you a step ahead for some down payment programs.
Down payment assistance is not in my area.
Down payment programs are available everywhere. Moreover, they currently have funds available.
Homes are too expensive in my market.
Again, help is out there. Oftentimes, requirements are based on median home prices in your area. Therefore, any needed assistance is tailored to your local market.
I can’t afford the amount needed for a down payment.
We’ve all heard it before. Down payments must be 20 percent of the cost of the home. Not true!
There are other options, including putting down just 5 to 10 percent. However, you may have to add in private mortgage insurance.
Paying mortgage insurance is no big deal.
In this case, it may or may not add up to a large sum over time, so it’s worth calculating the estimated long-term cost before making a final decision.
Don’t put down more than 20 percent.
If you can afford to put down more, you should. The more you put down, the less you have to borrow. Hence, you will end up paying less interest in the long run.
No gift money can be used.
This is one of the common myths about making a down payment that is worth talking to your potential lender about upfront. Depending on both the lender and the type of loan, certain gift money can be applied.
Summary
To summarize, don’t let these common myths about making a down payment stop you from exploring the possibilities. If you are ready to start your home-buying adventure, connect with us! For more local real estate news and trends, keep reading our blogs.