The past year has been difficult for all of us, especially for home buyers and sellers. Finally, we’re in mid 2021 and things are getting back to normal and so is the Real Estate Market. If you are someone looking to buy a home, you have probably been bombarded with tons of information about the home buying process.
It’s important to stay informed, but not all information you are being presented with is accurate. Home Buying is an important decision of your life and you shouldn’t make that decision without careful consideration of all the facts.
Don’t Let These Myths Stop You From Buying Home in 2021
Still not sure if you should be buying a home in 2021? These 7 common myths often deter clients from buying home; and why you shouldn’t believe them:
Myth 1: Buying Home is More Expensive Than Renting
We have been taught to believe that Renting is the cheaper option! This is not entirely true. According to Rentcafe, average Monthly Rent for homes in Jersey City is $2,700 and the average monthly payment for buying a home in New Jersey is $2400 (Business Insider) There are many factors that are taken into consideration when calculating your monthly payments to buy a home. In many cases, you will find that buying a home is actually cheaper than renting.
Do your research before renting a house, you never know you might find a deal where you will pay less monthly payment for the house than the rent! Talk to a mortgage broker and a real estate agent to help you find a great deal on the house within your budget.
Myth 2: Always Start Negotiating With the Lowest Offer
Real Estate Market in 2021 is very competitive and both buyers and sellers are more informed than ever due to the easy access to information through the internet. In this competitive market you can’t shop for a home with the former approach of negotiating a lower price. The Seller needs to believe that you are serious about buying and not just playing around. If you start too low they might say no instead of a counter offer. Trust your agent about the pricing, they know the market well and will represent your best interest.
Myth 3: Your Home Down Payment Must be 20% of the Price
One of the most commonly mistaken facts about home buying is that you must have at least 20% down payment for buying a house. In some cases, this is still true but it definitely isn’t a fact! While there is merit to putting down as much as possible, you can still purchase your own place with as little as 0% down by using the right loan.
According to a recent study by the National Association of Realtors, the median down payment for all buyers in 2019 was just 12%, and first-time buyers only put down an average of 6%. You might also qualify for an FHA or VA Loan, which offer down payments as low as 3.5% and 0% respectively.
It’s always a good idea to research different types of mortgages, as well as down payment assistance programs available in your area. They could provide the financial boost you need to finally buy a home.
Myth 4: A Home Inspection is Not Necessary
Homes always look perfect during showings and open houses, but don’t always believe what you see! A home inspection is always a good idea, even if the home looks as good as new. Certified Home inspectors can find any and all potential problems which can save you a lot of money in the long run.
If the home inspection does reveal any problems, it gives you an opportunity to negotiate the price of the home because of those problems.
Myth 5: You Can’t Buy Home if You have Bad Credit or Debt
The average American has accrued $38,000 in personal debt, excluding home mortgages. Even if you don’t owe quite that much. Any kind of debt or low credit score can seem like a pretty big roadblock if you’re trying to buy a home. However, there are still a few options that can get you on the path to homeownership.
One of the easiest ways to boost your credit score is to pay off your debts’ consolidating your loans into one monthly payment could help you reduce your debt-to-income ratio. There are also a variety of loans tailored to buyers with lower credit scores, such as FHA, VA, or balloon mortgages.
It can take time to pay off debt and rebuild your credit, but that doesn’t mean you can’t work towards buying a home. If you have any questions about your personal situation, it’s best to contact your agent or financial advisor. They’ll have plenty of information available to guide you in the right direction!
Myth 6: 2021 is not the Right Time to Buy Home
On the surface, this myth may seem true. Towards the beginning of 2021, many sellers chose not to list their homes, while many buyers didn’t feel comfortable moving during quarantine. This caused the national real estate market to experience an unusual spring slump. The good news is that the market has made substantial progress since March-actually, real estate has become one of the most stable investments you can make in 2021.
Pent-up buyer demand has helped the market recover in record time. In fact, the number of mortgage applications, closed sales, and pending sales are up by double-digit percentages compared to last year. And if you’re still hesitant to buy during a pandemic, you’ll be happy to learn that most agents now offer virtual tours and have put social distancing measures in place to keep clients safe.
Take Advantage of a Hot Market
Are you thinking about buying a home in 2021? Contact Us today to get the ball rolling on your real estate journey! We look forward to teaming up with you and finding you a place that checks all the boxes.
Need to sell before you buy? We can help with that, too!