Starting the home buying process is an exciting time for many first-time homebuyers. Many people have worked and saved for years to begin house hunting and often have preconceived ideas about what to expect. However, some of those home buying stereotypes can actually hinder the process—or even cost homebuyers money down the line. Don’t let homeownership myths derail your dream of homeownership. Instead, consider these 4 home buying myths and how to avoid them!
These 4 Home Buying Myths Could Cost You
Myth 1: The first step toward buying a home is to explore available houses.
It’s a common myth that exploring available houses is the first step toward buying a home. After all, house hunting, online or in person, can give you an idea of what you can afford, right? Actually, the first step towards homeownership is obtaining pre-approval. A pre-approval accurately assesses your current financial situation and signals to sellers that you can afford the property. If you wait to find your dream home first, you could lose the house to buyers prepared to back their offer with a pre-approval. Sellers and realtors won’t take your offer seriously without a pre-approval, which is why obtaining one first is essential for a smooth home buying experience.
Learn More: Mortgage Pre-approval Tips For Success
Myth 2: You can (and should) skip the home inspection.
You may think that since you got an appraisal on the property, you can skip getting a home inspection. However, the two processes are very different. An appraisal determines the house’s value, while a home inspection assesses the house’s condition. Without an inspection, you could be taken unaware of home hazards, like electrical issues, gas leaks, or structural issues. Unforeseen problems with your new home could cost you thousands in repairs—and compromise your safety.
Myth 3: You won’t qualify for a mortgage if you have student loans.
Another common homebuying myth is that individuals with student loan debt won’t qualify for a mortgage. While it’s true that lenders look at the debt-to-income (DTI) ratio, having student loans doesn’t automatically preclude you from mortgage approval. The DTI requirements can vary based on the mortgage program you’re applying for. A good rule of thumb is to keep your DTI around 36%, but if it’s higher, still speak with a Michigan mortgage lender to determine your options.
Myth 4: You’re guaranteed to make easy money by flipping a fixer-upper.
While purchasing a fixer-upper home can be a good investment down the line, counting on it to bring you windfall profits isn’t as easy as popular home improvement shows would have you believe. There’s often red tape regarding permits and taxes if the fixer-upper isn’t used as your primary residence during renovations. Before committing to renovating a fixer-upper, do your homework on permits, taxes, and the construction skills necessary to complete it.
Hopefully, busting these 4 homebuying myths —and learning how to avoid them—can help you confidently achieve your dream of homeownership!
About Michigan Mortgage Lender, Julie Krumholz from Superior National Bank
Julie Krumholz from Superior National Bank is no stranger to busting the myths that hold homebuyers back from achieving homeownership. For over 30 years, Julie has helped homebuyers with different financial backgrounds reach their homeownership goals. She’s experienced nearly every facet of the mortgage industry, from processing, closing, loan origination, underwriting, QC auditing, and even co-owning a mortgage brokerage firm. Julie uses her knowledge to match homebuyers with the programs that fit their needs and helps streamline the homebuying process.
Call Julie at 586-382-5482 for all of your home buying needs!