Whether you’re buying a home for the first time or the fourth, there is always a fog of misinformation that leads buyers astray. Don’t get lost! The experts here at Wyndham Capital Mortgage are here to take you by the hand and lead you out of the haze of confusion and into the promised land of homeownership. To help guide you on your way, here are five myths about buying a home.
5 Myths About Buying a Home
1. Buying Is Always Better Than Renting
If you’re currently renting and have been lead to believe you’re basically throwing your money away by not being a homeowner, know that this isn't true of every renter. The main thing to bear in mind with buying a home is that you’ll most likely have to remain in that home anywhere between five and seven years before selling the home in order to break even on the cost of buying, renovating, owning and selling your home. In some markets, it can take even longer than seven years. If within that span of time you have to pass up on a better job in a new city because you’re stuck with a mortgage, you may take a substantial loss.
2. 30-Year Fixed Mortgages Are the Best Bet
In terms of your home mortgage, you should focus on more than just your interest rate. Buyers who only plan on staying in their homes long enough to break even on the cost of homeownership before putting the home on the market will likely benefit from a shorter mortgage. Longer mortgages do come with lower monthly payments, but that could serve as a disadvantage in the long run. Always see the forest rather than the trees when it comes to your mortgage.
3. Real Estate Makes for a Great Investment
Depending on the market and the overall demand for homes, buying real estate as an investment may prove detrimental to your financial portfolio. Bear in mind that a great deal of the growth in the prices of homes is due to inflation and consumers’ overall ability to buy property. If your sole reason for buying a home is because you feel it’s a great investment, you might want to balance your decision by considering stocks. That being said, buying a home could be a good investment if you plan on renting it out.
4. The Mortgage Lender Who You Gives You the Lowest Interest Rate Is the One to Go With
Rather than see your mortgage lender as a middleman (or woman), it’s best to see your lender as a vital resource, one that can mean the difference between getting the keys to your dream home and continuing your search for the perfect home. The lender who has the lowest rates might have horrible customer service and be unreliable. On the other hand, the lender offering a slightly higher rate than you prefer could be fully dedicated to doing everything possible to see that you become the proud owner of your hew home.
5. You Can Write Off All of Your Mortgage Interest From Your Taxes
It’s true that a majority of homeowners can write off their home mortgage interest on their taxes, but it’s equally true that the deduction might not be as much as you think. Consider your other itemized deductions, such as charitable contributions and state/local taxes, along with your home loan interest to see how much the total exceeds your typical tax deduction. For more information on this myth, be sure to consult with a tax specialist.
Discerning fact from fiction and managing your expectations are sure to help you become a satisfied homeowner. Turn to experts for their professional knowledge, and give yourself plenty of time to make the right decision.