Buying a home is a major milestone. It offers immediate and exciting benefits. But one of its greatest long-term advantages is wealth building. Wealth building, or the process of generating continuous income from various sources, can pave the way to financial freedom and transformative opportunities. Throughout history, owning real estate has been key to passing wealth from one generation to the next. Unfortunately, many people have been excluded from homeownership because of discriminatory laws and practices, financial hardships, or a lack of accessibility, meaning they were not allowed the opportunity to pass on such wealth.
Check out these common myths we hear from prospective homebuyers that prevent them from making a plan to purchase a home.
1. Myth: I need a 20% down payment to buy a home.
Fact: Government backed products, such as FHA loans, can have a down payment as low as 3.5%. Many lenders also offer conventional products that require 10% or less for a down payment.
2. Myth: I need amazing credit to buy a home.
Fact: FHA provides flexible underwriting requirements for borrowers with less than perfect credit. Although higher credit scores typically lead to better interest rates, don’t worry if your score is lower–there are programs & solutions available. With a housing counselor, you can explore financing options, learn strategies to improve or maintain your credit score, and map out the next steps toward owning your dream home.
3. Myth: I can’t get a mortgage with student debt.
Fact: A student loan will be considered part of your overall financial picture, just like a car loan or other financial obligations. In fact, a student loan may give you “diversity of credit”, a factor lenders look for that shows you can manage different types of debt. Source
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