Debunking Common Home Buying Myths: Making Informed Decisions

Buying a home is a significant milestone that many aspire to achieve. However, misconceptions and myths can cloud the home buying process, leading potential buyers to believe that certain barriers stand in their way. At The Servion Group, we believe in empowering individuals and partners with accurate information to make informed decisions. Here, we aim to debunk some common home buying myths, such as the belief that a 20% down payment is mandatory and that a perfect credit score is an absolute requirement.

Myth #1: You Must Have a 20% Down Payment

The notion that a 20% down payment is a requirement to purchase a home is one of the most consistent myths we see. While it's true that a larger down payment can offer advantages like lower monthly payments and potentially avoiding private mortgage insurance (PMI), it's not the only path to homeownership. Partnering with Servion Mortgage puts a variety of loan products in your toolbelt to increase the likelihood that you’ll be able to help a vast majority of your potential borrowers.

Myth #2: You Need a Perfect Credit Score

While having a good credit score can undoubtedly open doors and secure more loan terms, it's not the sole factor of your eligibility to buy a home. Many loan programs cater to individuals with credit scores that are less than perfect. Also, working with a trusted lender can provide insights into improving your credit over time and identifying mortgage solutions that fit your unique circumstances.

Myth #3: You can look at homes without the help of your lender

A reputable real estate agent will likely ask you to have a pre-approval or pre-qualification letter before they take you shopping to ensure that they are showing you homes that you can qualify for.

Taking steps toward obtaining a pre-approval letter will leave your members better informed to enter the homebuying process and will demonstrate to sellers that they’re encountering a serious buyer with a strong likelihood of securing financing, potentially giving you an edge in a competitive market. It's wise to obtain pre-approval before beginning your home search to streamline the buying process.

Myth #4: It is not a good time to purchase a home

The real estate market is known for its fluctuations, and potential homebuyers often worry about timing their purchase perfectly. This myth can lead to hesitation and missed opportunities, as individuals hold off on buying a home in hopes of a more "ideal" market. While the real estate market does experience cycles, attempting to time the market perfectly is challenging. Your potential borrowers may have immediate needs surrounding homeownership due to lifestyle changes. In many markets rents are also continuing to rise making homeownership a preferable and more sustainable option, especially over time and when the long-term financial benefits of owning a home are considered. Historically, real estate has proven to be a sound long-term investment and waiting for the "perfect" time to buy may mean missing out on potential benefits. Instead of trying to predict market movements, focus on your personal circumstances, financial readiness and long-term goals.

As you or your customers embark on the exciting journey of buying a home, it's crucial to debunk the myths that may discourage or mislead individuals. The Servion Group is committed to helping navigate the complex landscape of home buying with accurate information and expert guidance. For more information or specific questions, please contact Ariel Jacobsen, Retail Account Manager at The Servion Group at ajacobsen@myservion.com.