Buying a home, especially for first-time buyers, can be a complicated, confusing undertaking. And to further complicate matters, the housing market is different from what it was just a decade or so ago. Some of the rules that once applied no longer matter now. It doesn’t help matters any that there is so much bad information and so many misconceptions floating around out there. So to try to cut through some of the confusion, we present here the biggest misconceptions about buying a home in Ventura County.
Common Misconceptions About Buying A Home In Ventura County…
You Have to Have Great Credit
Good credit helps, but it’s not an absolute must now. Lending standards have tightened up, but you can still get a mortgage with less-than-sterling credit. Banks and other mortgage lenders also take into account several other factors in the approval process, such as income, debts, assets, and your employment history. So if, for example, you’ve saved up a sizable emergency fund, this can offset a credit score that isn’t so great. A lower credit score doesn’t necessarily and automatically disqualify you.
The Down Payment Has to Be 20%
Another of the misconceptions about buying a home in Ventura County concerns the down payment. Long ago, yes, you typically had to put 20% down, but that’s not always the case now (though, generally, you’re better off putting more down). Today, you have several options to help you get by with a smaller (or even no) down payment. These options include FHA and VA loans, which allow you to put down only 3% to 5% of the purchase price. And most lenders will allow you to pay 5% to 10% down if you are willing to pay for private mortgage insurance. There are tons of options for down-payment assistance for low-income home buyers.
A 30-Year Loan is Best
Traditionally, a home mortgage loan was most often a 30-year loan. So this remains one of the more stubborn misconceptions about buying a home in Ventura County. A 30-year loan is not the only option and not always the best. A 30-year loan will allow you to have smaller monthly payments, but with a 15- or 20-year loan you will pay a lot less in interest over the life of the loan. You will have higher monthly payments with a shorter loan, but you’ll pay a lot less over the long haul.
If You Pre-Qualify You’ll Get a Loan
Another common one of the misconceptions about buying a home in Ventura County is that you will automatically get a loan if you pre-qualify. The problem here is that people are confusing pre-qualifying with pre-approval. Pre-qualification just lets you know what kind of mortgages and how large you could or may qualify for. Pre-approval, on the other hand, means that you have actually been approved and can, in fact, get a mortgage loan for the amount you have qualified for.
The Down Payment is the Only Upfront Cost
This one of the misconceptions about buying a home in Ventura County that can wind up causing a lot of financial heartaches. The down payment is only the beginning of your upfront costs in purchasing a home. You also have to take into account the closing costs, which can run from 3% to 6% of the purchase price, as well as a host of other fees, taxes, insurance and costs for inspections and credit reports.
You Don’t Need an Agent
This last of the misconceptions about buying a home in Ventura County is easily countered when home buyers understand just how much help a good agent can provide. And if you’re a first-time home buyer, going the DIY route really isn’t a good idea.