Myth!

Fact!

20% down payment is required
FHA loans require a mere 3.5% down!
You have to pay your student loans before you can afford a home.
Having student loan debt could be in your favor. It may improve your debt to income ratio, so you qualify for a better loan program or interest rate. Though it may seem overwhelming to add on any more debt, you have to remember your home will build equity.
Your credit score needs to be perfect (850)
The average credit score for renters in St. Louis is 650. Those rejected from renting had a 611 score. Boston is even tougher, with an average approved score of 737 and an average rejected score of 667. Now compare this with what it takes to buy a home. FHA loans allow credit scores as low as 600 and down payments as low as 3.5 percent.
All lenders are the same
Rates and fees vary based on the lender. Some charge upfront fees, others don’t. Some pay their employees a commission (resulting in an added cost to you), while others don’t. Do your research! You may even find that some lenders have access to down payment assistance or local loan programs that can provide thousands in savings.
The listing price is over-inflated.
In highly competitive markets, don’t set your heart on a home that is on budget or above budget. Sometimes, you need to offer more than the asking price to compete. If you’re looking in St. Louis, and your budget is $200,000, you may need to start looking at $178,000 homes and see where it takes you.
Spring and Summer are the best times to buy
Many people think that spring is the best time of year to buy, but the reality is — too many buyers competing for limited housing can drive up prices. Score a better deal by buying during the off-season. According to MarketWatch, inventory for starter homes peaks in October. More inventory means less competition, and therefore more time to do inspections and consider the home before putting an offer on it.
You should avoid adjustable-rate mortgages.
After the 2008 housing crisis, many buyers were wary of adjustable-rate mortgages. But if you’re planning on selling (or refinancing) your home within 10 years, opting for an ARM instead of a fixed-rate mortgage could save you thousands. It’s more common than you may think. According to the National Association of Realtors, homeowners age 37 years and younger sell their homes after an average of six years.
You won’t qualify for any savings programs
The federal government and other government-sponsored entities like Fannie Mae have created a variety of affordable lending options.
You should hire a friend or family member to be your agent
Especially in a hot housing market, working with an experienced real estate agent is key. We suggest interviewing at least a few agents before making a final decision.
At the closing table, the down payment is all you need.
Closing costs account for any fees that you incur when closing on the home. These can include inspection fees, origination fees, or appraisal fees. They’re usually split between the buyer and the seller and end up accounting for an additional 1%-2% of the property’s overall purchase price.
Only first-time buyers are entitled to payment assistance.
Even if you’ve owned a home before, you may still be considered a first-time home buyer. The Department of Housing and Urban Development considers anyone a first-time home buyer, as long as you have not owned a home within the last three years.

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