Owning a home is still a major part of the American dream, yet many people let intimidating myths keep them from making the dream come true. Here are a few home buying myths:
- You need a 20-percent down payment.
High home prices make saving 20 percent for a down payment very difficult for potential buyers. While putting down 20 percent means mortgage payments will be lower, many buyers can purchase a house with as little as 3 percent down.
- Your credit has to be perfect.
Having good credit makes finding an affordable mortgage easier, but several mortgage options are available to home buyers who have credit scores below 720. Some of these mortgages may still offer very affordable rates.
- You should always get a 30-year mortgage.
In the past, living in a house for at least 30 years was common, so 30-year mortgages worked well for home buyers. Today, individuals and families may be better suited to 15-year or even seven-year mortgages, depending on how long they plan to live in the home or how close they are to retirement.