Common Homeownership Myths Debunked
Even in today’s modern world, it can be tough to sort out the homebuying facts from the fiction. We’re setting the record straight for some of the most common homeownership myths so that you can make an informed decision about your homeownership goals.
Myth- Renting is Cheaper Than Owning
The Truth- The Rent vs. Own debate is complicated, and the answer differs depending on every unique circumstance. Purchasing a home can be costly upfront due to downpayment and closing costs, meaning that it only makes financial sense if you decide to stay in your home for at least three years. While the upfront costs may be higher, your monthly payment when buying is usually less than or equal to what you would be paying in rent, depending on your local housing market.
Plus, owning a home allows you to build equity over time and take advantage of appreciation while renting does not. With that being said, homeownership also comes with regular maintenance and upkeep that most renters do not have to pay.
Myth- A 20% Downpayment is Required to Buy a Home
The Truth- While putting 20% down on a home does come with some advantages, such as eliminating Private Mortgage Insurance, the days of needing to put 20% down on a home are long gone.
There are many financing options for buyers who don’t have a 20 percent down payment. Loan programs, such as FHA, start with as little as 3.5% down. Other loans, such as the VA and USDA, require little-to-no down payment for buyers who qualify.
Myth- All Home Improvements Add Value
The Truth: If you’re preparing to make home improvements, you should know that not all home improvements are created equal. Some will increase the value of your home and add to the marketability. Other projects, however, might not make much of a difference or could even have the opposite effect.
Projects with the highest resale value tend to be:
- Minor kitchen and bathroom remodels
- Outdoor decks
- Landscaping, particularly in the front yard
Projects that might not add to the resale value include
- Luxury renovations
- Converting your garage into living space
- Upgrading one room significantly while leaving the rest of the house as-is
Myth- New Homes Don’t Require Maintenance
The Truth: While new homes might require less time and money spent on maintenance than resale homes, they still require maintenance. Electrical and mechanical systems need regular checkups and care, and well as other appliances. Plus, weather and everyday wear and tear will require maintenance as well.
Myth- Purchasing a Home is Purely a Financial Decision
The Truth- Yes, buying a home is a huge financial decision, and some consider a home to be an investment. But it is also a place of shelter and security for you and your family, and a place to call your own. It also protects you from having to move unexpectedly due to your landlord, gives you pride in ownership, and affords you the ability to customize your home.
This is not a commitment to lend.
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