5 Common Misconceptions About Buying Your First Home – 2024 Guide

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It is no secret that buying your first house is a huge step and an investment that might leave a mark on your life forever. It might set you on a good or bad path, depending on what kind of decisions you make i.e. what kind of house you buy. There is definitely is a stressful and frustrating experience, but the decision has to be made under or later. Unfortunately, there are several rumors, myths, and misconceptions when it comes to buying which makes things even more complicated and difficult.

If you believe those myths or misconceptions, you may end up making an ultimately bad decision. To avoid that from happening, you might need to do some research to figure out all those misconceptions and to discover the facts.

Thankfully, all of these common misconceptions are starting to get clear up. People are slowly figuring out that these are just remorse and they are not really true, making their entire home buying experience much simpler and not as stressful.

To help this trend of clearing up myths and rumors, I decided to write this article and talk about the most common misconceptions that are circulating on this subject. I hope that with this article I will be able to assist many people in making their decision when buying a house or an apartment.

1. It is much better to rent

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Whether it is friends, family members, or coworkers, you will often hear many of them saying that it is much cheaper to rent a place than owning it. This may be true in certain large and expensive cities, but ultimately it is not true. It is a misconception that has been going around for years and maybe even decades.

The reality is that you could pay thousands of dollars for rent and you will have nothing. Sure, you will have a place to live, but once that service ends, you have nothing to show for the money that you have spent. It is not really cost-effective and you want to save you a lot of money.

Do not get me wrong, if you do not have the money right now to buy your own home, renting is definitely a good decision, especially if you do not have anywhere else to go. Renting is a great service, but if you are aiming to purchase your own property, it is not the best decision. So no, it is not better to rent.

2. Interest rates are rising higher and higher

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Most of us average people do not have the type of money to just pull out a wide of cash and pay for an entire house. That only happens in the movies or in the celebrity Hollywood life. We do not have millions and millions of dollars in our pockets. So, what does the normal, average person do? Well, of course, they take a loan or mortgage.

Obviously, there will be some people that have been lucky enough to have that kind of lump sum to make a one-time purchase and to forget about interest rates, loans, or mortgages. But, that kind of situation is quite rare. Since you are reading this article, I assume that you have not been so lucky to have such an amount in lump cash which means will probably settle for a home loan.

However, the problem is with the fact that there is news circulating that interest rates are rising higher and higher as years go by. Naturally, it is normal for interest-rate sometimes to rise and fall, but it is usually not a huge amount.

You need to understand that this kind of rumor is just a myth and that the interest rates have been the same for the past few decades. There is nothing wrong with wanting to take a home loan.

Although, MakesCents.com.au believes that everyone should take a few days off to compare offers of different banks and lending companies. This will allow you to find the best interest rate possible.

3. You have to pay off all of your debts first

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In many countries, it is not an uncommon situation to have debts. Many people do have doubts in different segments. Some are still paying off their college bills, others their new car, and who knows what else. The fact is that debt is a normal part of society.

Unfortunately, it seemed like many people are sharing a rumor here and there that it is impossible to get a loan for a home if you have not paid off all of your other debts. This is not true at all. Of course, your previous loans and debts can have an impact on your credit score and on your ability to borrow money, but that does not make the situation impossible.

Whether you can or cannot take a loan depends on many different factors.

4. First, find your place and then take a loan

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If you thought that you have to first find the home of your dreams and then look for a loan, you are mistaken. If you take a loan after you find the perfect home, someone else might buy it. You might miss your opportunity.

So, why not borrow the money first and then start looking home. Because once you find it, you will be able to purchase it immediately.

5. A 20% down payment is the minimum

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Over these past few years, I have been trying to tell people that you do not have to settle for a 20% down payment. But, it seemed like many people believe that this is the bare minimum and that no one will go lower than that.

However, that is far from the truth because you could easily make a contract with a 10% down payment. Although, your possibilities will definitely be determined by your situation. The opportunities vary from person to person.

These are the five most common misconceptions about buying your first house and I believe that these are the worst ones. Keep in mind, there are also some other myths and rumors that you should be aware of.