Homes like many things come in a wide variety of shapes and sizes. There is definitely not a one size fits all approach to buying a home and you should not listen to everything you hear but instead rely on research, an experienced agent and good logic to make the best choice for you. There are quite a few commonly believed myths out there that keep people confused about real estate. Here are some things you may have heard and what you need to know.
You Must Have 20% for a Downpayment to Buy a House
This is an extremely common misconception and keeps many buyers renting longer than is necessary. While some mortgages do require a 20% downpayment and there are many reasons why this can be a good thing, there are a lot of mortgage options that don’t require a downpayment that large. Many loans can be obtained with a 3%-5% downpayment making it more affordable for you to purchase a home if you don’t have significant savings. You should still never purchase a home that you aren’t financially comfortable with but don’t let a downpayment be the only thing holding you back if you have great credit and a good job.
Buying is Always Better than Renting
Though the cost of renting continues to rise, it's a common myth that buying is always better than renting. It holds true that renters are investing in someone else's property rather than investing in a personal property, though depending on location and your current lifestyle, renting may be a better choice. Why? In some metropolitan locations, there may be few properties available to purchase meaning you may have to settle for living somewhere you don’t want to be instead of renting in the perfect location. If you are just starting out, you may need a roommate to help make ends meet and purchasing a property is a long term scenario that is best left to those who have made a permanent commitment and not someone that you may only live with temporarily. Lastly, if you don’t intend to live in one location for at least several years, it also doesn’t make sense to purchase a home.
Buying a Home that Needs Work will be Cheaper than Buying a “Perfect” House
While the initial cost may be less for a fixer upper than a nicely renovated home, don’t forget to factor in the cost of repairs. Some repairs cost more than others and if you are counting on doing a lot of the work yourself, you may still need professionals for some items. Also, make sure you will be happy living in a home that needs work for months or years if it takes that long to complete it. Do you have the necessary savings to go ahead and make the updates you want to make or will you need to save and make repairs as you have the money to do so? Repairs add up quickly so make sure you factor that into your cost before you decide if a home is a good deal or not.
The most important thing to remember is that only you know what’s best for you. Let me know if you have any questions about buying a home. I can’t decide for you but I can answer all of your questions so you can make an informed decision when the time is right.
The Janis Penick Team
RE/MAX Bastrop Area
Serving Bastrop, Cedar Creek and Smithville
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