Finally ready to make the transition into home ownership? That's awesome, in this exciting time you may be turning to friends and family for an insight into the process. However, there seems to be a circulation of misinformation spreading around, so I'm here to clear up a few myths. 

1. THE FIRST STEP IS SEARCHING FOR A HOME

You know the saying, "Don't put the cart before the horse," well that's important to remember when it comes to buying a home. You don't want to start looking for a house until you sit down with a lender and discuss what the bank will qualify you for. If you fall in love with a house that's $250,000 and come to find out you're only qualified for $200,000 you can get your hopes crushed and waste a lot of time. Don't start the process on the wrong foot and make sure the numbers line up.

2. YOU DON'T NEED A REAL ESTATE AGENT

For starters, when buying a home, 99% of the time the buyer's agent gets paid by the sellers. That random 1% can be for odd circumstances. So you're getting to use the services of a real estate agent for free. Having a real estate agent on your side means you'll get to see homes that aren't as readily available on public searches, you avoid outdated listings and scammers (there are lots of them), and you have protection when it comes to navigating the legalities of contracts and buying a home. Why wouldn't you want an awesome negotiator working to ensure you get the best from the transaction? For FREE!

3. YOU CAN'T BUY A HOME WITH BAD CREDIT

Fortunately for some, this is a myth. Lenders and banks come by the hundreds of thousands and all though there are a few loan options, a lot of lenders can work with credit scores down to the low to mid 500's. Get in touch with an agent to help you connect with the right lender who can help you potentially approved. There are a lot of factors that go into approvals, but your credit doesn't have to be a sore thumb during the process. However, you will be doing yourself a favor if you connect with a credit repair specialist to at least get those numbers in the 600's. A better score will lower your interest rate.

4. YOUR DOWN PAYMENT HAS TO BE 20%

Think you have to sell an arm and a leg to buy a home? Not at all! An FHA loan only requires 3.5% while a conventional loan only requires 5% down. There are a lot of programs that can potentially help you with down payment assistance or  0% down mortgage. USDA and VA loans are the most popular 0% down programs. If you qualify, this can take a big chunk off the amount of cash you have to bring to the closing table. 

5. DOWN PAYMENTS ARE THE ONLY UPFRONT COST

This is one of the biggest misconceptions. There's a lot of cost that goes into buying a home, and that includes upfront costs. Earnest money deposits are due upon execution of the contract and are typically 1% of the purchase price. If you are having the home inspected, inspection cost can range from $350- $500 and payment is due at the time of inspection.  Aside from your down payment, you then have to pay for closing costs. And NO, they are not the same thing. Closing costs can range anywhere between 3-6% of the purchase price. In certain markets, this can be negotiated for sellers to cover by rolling it into the offer price, but whether that decision is smart to do or not when it comes to landing your dream home will need to be discussed with your agent.