October is a month filled with TRICKS or TREATS! If you are out searching for your dream home in North Iowa this month, you want the process to be filled with the latter. Unfortunately, there are many misconceptions on home buying that can end up feeling like a trick. Let us help you turn those myths from tricks to treats and get you into your new home today!
TRICK: The search is the first step.
TREAT: Home buyers often think that the very first step of the process is searching for your new home. Keep away from the internet until you start with your finances. Your first step in the home buying process should be getting your credit in good shape and getting pre-approval for a mortgage. This first step allows you to set an appropriate budget for you, which you can in turn use to begin your search and makes you attractive to sellers.
TRICK: You can’t buy a home with bad credit.
TREAT: You will have a harder time buying a new home if your credit is poor. However, do not allow this to keep you away from fulfilling your dreams of home ownership in the future. Take the time NOW to start getting your finances in order. You can also look into financing options, such as FHA loans.
TRICK: A 30-year mortgage will save you money.
TREAT: It might seem like the 30 year time frame will save you money but do not be fooled. You will actually be paying more in the end since you are accruing more interest over the longer time frame. That is not to say that a 30 year mortgage is not a better option than a 15 year one for you. Just make sure that you have a full understanding of what works best for your finances. Check out our helpful Finance Information for helpful information on the loan types.
TRICK: The down payment is your only upfront cost.
TREAT: Put money aside for the down payment AND credit reports, closing costs, home inspections, insurance, and contingency when you start saving for a new home. There are always more costs incurred during the home buying process than you might expect so it is best to be prepared for anything.
TRICK: The down payment must be 20%.
TREAT: While a down payment of 20% keeps you away from Private Mortgage Insurance (PMI), it is not absolutely required to purchase a new home. If you are willing to pay the monthly PMI fees, look at loans with a 5% or 10 % down payment. FHA loans and other down payment assistance options might also be available.
TRICK: Home inspections aren’t necessary.
TREAT: Never, ever forego a home inspection. Without the inspection, you are making yourself vulnerable to any issues that are hiding below the home’s surface. This can turn your new home into a financial burden that you were completely unprepared for. Find out any potential issues with a home inspection to keep you protected.
TRICK: Focus on your needs right now and not future plans.
TREAT: Find a home that can grow with you. While you obviously need to consider your current situation and what home will fit best immediately, you should always be thinking ahead to what you and your family will/might need in 10, 20, or even 30 years from now. This will give you more flexibility in the future.
TRICK: You have to offer at least asking price.
TREAT: Home sellers are hoping to make a good return on their home and as such are usually hoping that they will at least receive the price that they are asking for. Despite this, however, you might still be able to offer below asking price without the seller denying you. Sellers are often willing to negotiate a lower price for buyers with great credit, mortgage pre-approval, and the full down payment.
TRICK: You don’t need a realtor
TREAT: Working with an Experienced Realtor as you buy your home is truly for your benefit. A realtor is an expert in the local market and has years of experience negotiating for buyers. Alleviate the stress of buying a home (especially your first one) by having a realtor by your side.
Search North Iowa Homes For Sale to find the perfect home free of these warning signs! Give Jane Fischer & Associates a call at 641-424-HOME (4663) and visit our Website to find your dream home today!