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Four Myths That Keep Renters from Buying a Home

Buying a home can be an intimidating experience, but the ability to invest in your home, build equity, and get on the path to owning a home of your own is a dream for many people. However, the jump from rental to ownership can be a huge and intimidating task, one which makes a lot of potential buyers nervous. Because of the uncertainty, there are a lot of myths we frequently hear from renters. On this blog, we’ll set the record straight on a few of them and show that home ownership is closer than you might think.

I Don’t Have a Down Payment

Traditionally, a down payment on a home is thought of as 20 percent of the home’s total cost. Let’s face it, no matter how large of small the home you’re buying, that’s a lot of money, and for first-time home buyers in particular, it’s an amount of money that you very likely don’t have on hand. Believe it or not, this is fairly normal, and believe it or not, you can still get a mortgage with a lower down payment amount. Talk to potential lenders about their options for reduced down payments—some lenders will offer mortgage loans with a down payment as low as three to five percent! These will carry extra fees and mortgage insurance requirements, so your monthly payment will be more expensive, but if your down payment is all that’s holding you back, you have more options than you think!

I Can’t Find a Home I Like in My Price Range

Santa Clarita has thousands of homes and dozens of them are for sale at any given moment. The market changes every day, so while you may not be able to find something you like that today, that literally could change tomorrow. That being said, if you’ve been searching for months and haven’t found something that fits your needs, take a closer look at your needs to figure out what’s the most important to you: is a location near good schools important, or are features in your home more necessary? Also, can you afford a home that matches what you’re looking for?

You can find the home you’re looking for, but what you’re looking for might take some adjustment. Make a list of what’s the most important to you as a buyer and then start your search again based on that list. You may be surprised how quickly you find a home that makes you happy simply by changing your perspective.

The Housing Bubble will Burst

California is in an interesting position in terms of a housing market right now. Mortgage rates are at historic lows, making loans cheaper than ever. This has led to lots of potential buyers on the market. However, the number of homes on the market is still low. When mortgage rates increase, home prices will have to drop to accommodate for the budgets of potential buyers. Let’s look at an example: if you purchase a one-million dollar home here in the hills of Valencia, that same home will have to sell for $900,000 to keep monthly payments the same if interest rates were to rise a single percent. While mortgage rates will rise eventually, prices probably aren’t going to drop anytime soon.

I Can’t Compete Against Cash Offers

Anyone who’s selling their home knows that an offer to purchase a home in cash is usually a much quicker transaction with fewer contingencies and a faster close. However, they usually also come with a much lower price tag. Therefore, there are two types of sellers: those who will take a faster, cash-based sale at a lower cost, and those who want to get the best price for their home and are willing to work with those who have a lender. Your realtor is your best ally in these cases, and can work with your seller, their agent, and your lender to help you craft a deal that’s ideal for everyone involved, including making your seller see the benefit of working with you instead of just opting for a cash bargain.

If you’re looking to purchase a home, Dippy can help! We take pride in helping residents of the Santa Clarita Valley find the home of their dreams and close the sale quickly while getting the best possible deal. Dippy is passionate about helping her clients find a home that fits their needs and their budget, and makes the experience as personalized as possible.

Looking to buy a home? Call Dippy today at 661-441-3304 to set up an initial appointment and start looking for the right fit for you!