What’s stopping you from owning a home?
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What’s stopping you from owning a home in 2020? Here are five common misconceptions about buying a home. Although people have many different reasons for delaying home ownership, none of these misconceptions should stop you.
1. I don’t have enough money saved up for a down payment
Sean Finch, a mortgage broker with Interwest Mortgage, says that one of the biggest misconceptions he runs into is buyers thinking they need 20 percent down to buy a home. Down payment assistance programs allow buyers to buy a home with 0 percent down or half percent down. People who don’t have a lot of money put down on a home loan can still buy.
Don’t let down payments discourage you from owning your own home!
2. I don’t have enough established credit or my credit score is too low
Many homebuyers who have been stuck in the rental trap for years don’t believe they will qualify for a loan, Martha Martin-Bermudez at RE/MAX Prestige says. They think their credit score is too low, that they don’t have enough credit history or enough established credit to get approved.
But what she finds is that if they are willing to speak to a lender, often the lender is either able to get them into a home loan immediately or is able to help them quickly work toward better credit.
3. I have to wait seven years for my bankruptcy to clear
Mike McCulloch with Synergy One Lending says many of his customers who have been through bankruptcy are under the impression that they can’t buy a home for seven years. But after a Chapter 7 bankruptcy, buyers can often be financed for a home in as little as three years. And individuals who have filed for a Chapter 13 bankruptcy can qualify again in as little as one year.
4. I haven’t been at my job long enough to apply for a home loan
“We also get asked all the time if clients need to be at their current job for two years. But as long as a buyer has a two year work history in a similar line of work they don’t have to be on their current job for two years,” says Finch.
Buyers who have transferred, accepted new jobs or even started a new career can get approved with as little as a job acceptance letter in some cases.
5. My credit will go down significantly if I let a lender check my credit for a loan
The credit bureaus don’t reduce credit scores quiet as harshly as other credit inquiries if an individual is looking for a mortgage, says McCulloch. He said the credit score change is not as drastic as one might think.
A word about home ownership
Finances are a hard subject to talk about. Applying for your first loan, or getting back into home ownership after a difficult life event can seem scary. But you aren’t alone. You can build equity and jumpstart your financial future by owning your own home. It might be embarrassing or feel shameful, but remember, most lenders have heard worse stories than yours. Real estate agents, lenders, accountants or even just friends and family a great place to start the discussion. Find someone who you feel comfortable speaking to and own your own home in 2020.