Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Debunking the Myths about Homeownership

Print
Font Size:
Default font size
Larger font size

Posted: Wednesday, May 28, 2014 10:00 pm | Updated: 1:37 am, Thu May 29, 2014.

(StatePoint) As a result of the recent housing crisis, many potential homebuyers, especially first-timers, are hesitant to enter the market. But if you’re holding back, evaluate why. Experts say your reasons may be based on myth.

“Buying a home is more affordable than ever for families with stable incomes and good credit,” says Christina Boyle, Vice President and Head of Single-Family Sourcing & Relationship Management, at Freddie Mac.

So before ruling out homeownership, get the facts. Boyle is offering some tips to help you sort fact from fiction.

• Myth:   I need to make a big downpayment, as much as 20 percent, to get a mortgage.

• Fact: A 20 percent downpayment is not the golden rule. Generally you should expect to put down about five or 10 percent. Note however, you may be required to pay mortgage insurance if you make a downpayment of less than 20 percent.

When deciding whether homeownership is right for you, don’t forget to consider other expenses like closing costs, property taxes, and maintenance costs.

• Myth:  I need perfect credit to buy a home and will never qualify for a loan. 

• Fact: In response to the housing crisis, banks re-evaluated the criteria for lending money to help put buyers in a more financially comfortable position and ensure they can afford what they buy.

So while it’s true that getting a mortgage today requires a stronger credit history than in past years, you don’t need perfect credit. Keep in mind though, that the higher your score, the more options you have when looking for a mortgage. 

• Myth:  I don’t make enough money to own a home so I plan to rent for the long-term.

• Fact: In many areas of the country, it is more affordable to own a home than rent one, especially as rents are rising fast.  With a 30-year fixed-rate mortgage, you’ll have the certainty of knowing what your mortgage payment will be for 30 years, whereas rents could continue to rise.

Despite these facts, note that homeownership is not necessarily the right step for everyone. If you move frequently or don’t have time for home maintenance, renting might make more sense for your lifestyle.

• Myth:  Mortgage rates are rising too fast and I’ve missed the window of opportunity to buy.

• Fact: While mortgage rates have risen over the past year, they are still at near historic lows, with a 30-year fixed mortgage under 4.5 percent at the start of 2014.  These rates make homeownership very affordable.

For comparative purposes, in 2000, rates averaged eight percent; and in the 80s, they spiked to 18.5 percent. To put that in perspective, a mortgage payment on a $150,000 loan at today’s 4.5 percent is $760 per month, whereas in 2000, it would have been $1,100 (not including taxes and insurance).

Free home buying resources, such as worksheets, mortgage calculators, and overviews of the mortgage process are available at www.FreddieMac.com.

Considering homeownership? Don’t assume it’s out of reach. Educate yourself on your local market and reach out to a housing professional to get started.

Photo Credit: (c) Stuart Miles - Fotolia.com

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.

Poll

What would you like to see in Lodi's parks?

Lodi's Parks, Recreation and Cultural Services Department is hosting a public workshop at 7 p.m. at Hutchins Street Square to find out how it can better meet the needs of the community. What would you like to see in Lodi's parks?

Total Votes: 197

Loading…

Your News

News for the community, by the community.

Featured Events

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists