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Five Homebuying Myths

Five Homebuying Myths

Ben Thompson•
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Many of us grew up having visions of homeownership — and the house that comes with it. Owning your own home and having a place to build lasting memories is a major life milestone. While home shopping is exciting, you may come across a variety of misconceptions that can keep you from buying a new home, rather than pursuing your dream of homeownership. Read on as we reveal the truth behind these homebuying myths and the exciting facts about the home shopping journey.

Model home living room

A common misconception is that you need to put 20% down when purchasing a home. While putting 20% down can help reduce your monthly mortgage costs, it’s not a necessity. You have a variety of loan options when home shopping and a down payment can be as low as 3% for some. According to a recent report from the National Association of Realtors, you’re far from alone if you thought the 20% myth was factual. A survey found “35% of consumers think they need 16% to 20% for a down payment and 10% of consumers think they need more than 20% for a down payment.”

The same report explained home down payment averages — for first time and repeat homebuyers:

  • Since 2018, the average down payment for first-time homebuyers has been between 6-7%.

  • For those buying a home for a second or third time, the average down payment was 17% in 2021.

While there are a variety of loan options available, speaking with a professional in the industry will help provide more clarity as you embark on your home shopping journey. It will also help you gain more insight regarding the specific loan terms, including more information on down payments and Private Mortgage Insurance (PMI).

Home shoppers speaking with sales agent

One of our first “grown-up” moves as an adult includes leaving our parents’ home and moving into that first apartment. However, some people may continue to move from rental to rental, because it may seem more budget friendly. That misconception can hold some people back from homeownership.

Tip: Renting is not necessarily more affordable in the long run. Rents are rising, and will likely continue to do so over time. With a fixed mortgage, buying a home now can lock in your monthly cost, which means your housing costs ten, fifteen, or twenty years down the line can be more affordable than they would be for someone who has continued to experience rental increases. At the end of your loan term, you will own your home free and clear, and only have costs for things such as maintenance, insurance, HOA, and property tax.

A hidden gem of homeownership lies in the tax benefits it brings. Investopedia says to think of credits like “coupons” and deductions as reducing your tax liability.

  • Standard deductions can cover mortgage interest, mortgage points, and PMI.

  • Some states offer homebuyer tax credits. Consult with a tax advisor in your state for your options.

Buying a Tri Pointe home includes additional cost-saving benefits such as our LivingSmart® program. The program includes features that are designed to decrease your home’s energy and water usage, improve your indoor air quality, and reduce your monthly energy costs.

Home design is another reason why buying is more advantageous than renting. If you want an upgraded kitchen or the latest home design elements and you’re renting, you’ll mostly likely need to move, since your personalization options are limited. When you purchase a home with Tri Pointe, you have complete ownership of the new environment you’ll call home. Each of our homes feature the latest in home design and technology. Our Design Studio allows you to see your dream home vision come to life. It’s more than just picking out a paint color — you’ll have the opportunity to choose elements like lighting, countertops, and flooring.

Model home kitchen with dark cabinets

According to a recent review of buying trends, more and more millennials are buying homes, even when they have outstanding debts. While it may seem odd to do so, there’s a reason behind it. Your debt-to-income ratio is more important than each individual debt. If you want to know where you stand financially, speaking with an industry professional will provide clarity and a better understanding of your options.

Most importantly, it’s recommended that you don’t take on new debt, apply for a new credit card, or buy a new car while going through the homebuying process. Keep your finances as stable as you can to streamline the purchasing process.

Model home kitchen with white cabinets

Buying a home with bad credit isn’t impossible, it just takes some research so you know your options.

  • Credit scores 500 to 579 are considered low, but you can still qualify for a mortgage with that history. With this score, you’ll need to put down a minimum of 10% for an FHA loan.

  • Your loan consultant may or may not advise you to pay off any collections or judgment before beginning the underwriting process. There are good reasons for both options, and each situation is unique to the individual’s circumstances.

Your credit doesn’t define you, your determination does. Once you learn about your options, you’ll gain more clarity regarding your path to homeownership.

Family on a walk outdoors

This tall tale plays into the very common, very human tendency to put off today what we can do tomorrow. There actually isn’t a perfect season to purchase a home; some experts may suggest the market differs in summer versus winter. There are benefits to buying during either season considering factors such as inventory or price.

We recommend buying when you are ready, rather than targeting a specific season. Waiting for the right season to buy your dream home will only delay the homeownership process. As with everything, it’s all about finding a balance and understanding what you want for yourself before investing in your future home.

Myths and misconceptions can hold you back from beginning your home shopping journey, so remember to check the facts before taking them into consideration. Pro Tip: Work with a mortgage company to learn more about your homebuying power. Our affiliated mortgage company, Tri Pointe Connect®, can help you understand your financing options, with a simple, four-step process.

Share your Tri Pointe homeownership journey with us on Facebook and Instagram — remember to tag #TriPointeHomes!

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