A few months back we looked at 5 common myths in Real Estate. These misconceptions may deter a person who is thinking about buying or selling a home, so here are 5 more myths that we want to put to rest.
A minimum of a 780 FICO® score is needed to buy: Of course, the higher the credit score the better when it comes to buying just about anything. However, it doesn’t need to be as high as most people think. As the chart shows, 53.2% of approved mortgages had a credit score between 600 – 749, so don’t let your credit score stop you from trying to buy.
The only upfront cost when purchasing a home is the down payment: This isn’t always the case, as the seller may decide you’re responsible for the closing costs, which can total anywhere between 3 – 6% of the purchase price, and can vary by state. There may also be costs for inspections, credit reports, insurance, and more.
A 30-year loan is always the best option: While many first-time buyers choose a conventional 30-year loan, it may be worth looking at a 15 or 20-year loan, which allows you to spend less money on interest in the long run. However, a shorter loan term equates to higher monthly payments, so just be sure that you stay within your budget with whatever type of loan you choose.
Renovate the kitchen and bathroom before you sell: According to Remodeling Magazine’s 2017 Cost vs. Value Report, you will likely only recoup 64.8% of what you spend on a bathroom remodel and 65.3% of what you spend on a major kitchen remodel for a mid-range home. The biggest return? Insulating the attic with fiberglass recoups 107.7%!
You don’t need to prep a home before selling it: While the first 3 – 4 weeks on the market are the most critical when selling a home, do not make the mistake of listing your home before it’s ready! The majority of buyers are looking for a home that’s move-in ready, so steps like basic cleaning and repairs, staging, and pre-listing inspections can help maximize the sale price while minimizing the time it sits on the market.
