First Time Homebuyer Mythbusting

by

blog-author-clayjeffreys3

The spring market is just around the corner (honestly, it has already started, but let’s just stick with “spring market” for this post), and there will be plenty of buyers out looking for their new home. Some of those buyers will be first time home buyers.

Every year when I work with first time homebuyers, I have to dispel myths about going through the home buying process as a first time homebuyer. With the help of Adam and Jamie, we will bust the three myths I get most often.

OK guys, let's get to work!

OK guys, let’s get to work!

1. I’ve never bought a home before, so I have to use an FHA loan: this can’t be further from the truth. Conventional loans will allow you to buy a home with as little as 5% down and a credit score as low as 620. Unless you want to use the FHA 203k rehab loan, or just don’t have 5% down, you don’t have to use an FHA loan and pay an exorbitant amount each month in private mortgage insurance.

Myth dispelled – if you are hesitating buying a home because you don’t want to use an FHA loan, don’t worry about it. You don’t have to use an FHA loan to buy a home!

2. I don’t have a 20% down payment: Actually, I hear this whether the client is a first time homebuyer or a tenth time homebuyer. As I stated toward the end of last year, you don’t need 20% down to buy a home. Conventional loans only require a 5% down payment. You can even look to use a Lender Paid Mortgage Insurance loan to put 5% down and not pay private mortgage insurance each month. FHA loans only require 3.5% down.

Myth dispelled – you don’t need to wait to buy a home simply because you don’t have a 20% down payment.

3. I don’t have excellent credit: As I mentioned earlier in this post, you can buy a home with a credit score as low as 620. In 2013, if your credit score was down to 620, you would need a 20% down payment. This is no longer the case. Conventional loans can be used to buy a home with as little as 5% down and a credit score as low as 620.

Myth dispelled – you don’t need excellent credit to buy a home.

Now you be in a situation where it is better to save more money for a larger down payment… or it could be better to wait a few months to try and increase your credit score… making those decisions is easier after talking to a professional.

The point of this post is realize that if you are not even thinking of buying a home because your credit is in the mid 600’s or you don’t have 20% down, you don’t need to wait. At least have a phone conversation to see where you stand. If you are buying a home in Georgia, contact me today to get started!

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