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10 Common Home Buying Myths

10 Common Home Buying Myths

Cedar Falls

  1. Buying is always better than renting:  This depends largely on the price of the home and how long you stay in it.  It generally takes 5-7 years and sometimes longer just to break even with the costs of buying, owning and selling a home.  Along with this, you will want to keep your home long enough to ride out any dips in the real estate market.
  2. Real Estate is a good growth investment:  Most growth you see in home prices comes from inflation. Some housing markets grow better than others and some take bigger dips than others.  What makes them good investments is the ability to lock in your housing costs or rent it out for income, the opportunity to add value through improvements and the power of leverage (if you put $20k down on a $100k property that appreciates 3%, you earned a 15% return on that $20k).
  3. A 30-year fixed mortgage is always the best deal If you plan to keep your home for 30 years that could be true, but if you intend to sell your home in 5-7 years, then a 7-year fixed rate could be a better solution because the longer the rate is fixed for, the higher your interest rate will be.
  4. Always choose the mortgage lender with the lowest interest rate:  Interest rate and cost is always a factor but differences in fees may matter more.  In addition, the reputation and reliability of your lender could mean the difference between getting your dream home and losing it to another buyer.  Along with this, you'll want someone who can work well with your real estate agent.
  5. You can afford a mortgage payment as long as total debt payments are less than 36% of your income Although the 36% rule may be what lender use, you should track your actual spending and then see how much more you can really afford to pay towards a home. Furthermore, you should be saving at least that much towards your down payment to verify if you can really do without that income.
  6. Everyone can write off all the mortgage interest from their taxes:  Most taxpayers can write off the interest they pay on their mortgage loan as a tax deduction, but the value of this write off may be less than expected.  It is based on combining this write off with other deductions, and if that total is less than the standard deduction given to everyone, then there is no additional benefit.  
  7. You need a 20% down payment:  Although putting down 20% is ideal, you can put down a smaller down payment in exchange for paying PMI (private mortgage insurance) until you have enough equity in the home to have it removed, usually 20%.  FHA and VA programs require down payments as low as 3.5% and 0% if you and the property qualify.
  8. All you need upfront is the down payment:  Along with the down payment, closing costs can be another 2-5% of your home's purchase price.  In addition, you should keep  enough emergency  cash reserves to cover at least  3-6months of necessary expenses and factor in things such as home repairs, improvements and furnishings for your new home.
  9.  You need to save for your full down payment:  There are a number of government and some private programs that offer assistance, primarily for first-time home buyers with low to moderate income.  You may also look into taking a loan from your employer's retirement plan, withdrawing up to $10k from your IRA or taking a hardship withdrawal from your employer's retirement plan.  Just make sure to look into the rules, regulations and penalties for these options.
  10. The only additional ongoing cost will be PITI (principal, interest, taxes and insurance):  Don't forget any applicable homeowner's association fees, utility expenses including electric, gas, water, sewer, trash, maintenance costs and optional costs such as internet and cable/satellite. 



    Family Realty always make sure our friends and family are completely informed! We can help you understand these home buying myths and can help make sure you're making the best decisions for you when it comes to home buying and selling.  Visit us at www.ViewLouisvilleHomes.com for more information.

    You can also find out more about these 10 common home buying myths by going to www.forbes.com.
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This Weekend Events in Louisville

Events in Louisville: May 16-18, 2014

churchill downs


Venue: Louisville Family Fun
Date/Time: 5/17/2014, 10am-2pm
Admission: $10/person ages 2-adult
Event: Archeology Exploration Day
-Engage in a dinosaur egg hunt, arts & crafts, LEGO build, fossil dig and storytime

Venue: Gheens Science Hall & Rauch Planetarium
Date/Time: 5/18/2014, 1-4pm
Event: National Astronomy Day
-a special $5/person admission to the public shows. In addition, representatives from the Louisville Astronomical Society will be there with solar telescopes and other activities.  Everyone is welcome to enter a drawing for great prizes including: Celestron AstroMaster 70AZ telescope, a year subscription to Astronomy Magazine, a family membership to the planetarium and many more. For more information, go to www.louisville.edu/planetarium.

Venue: Kentucky Center for the Arts
Date/Time: 5/17/2014, 11am & 2pm
Event: StageOne's Diary of a Worm, A Spider, and a Fly at the Kentucky Center 
Admission: $14.75
-This is a musical comedy adapted from the popular books series.  Take a look at the world from a bug's perspective and perhaps you'll see that their lives are not all that different from yours. Recommended for ages 4 and up.  Single tickets are on sale through the Kentucky Center.  To purchase, call 502-584-7777, order in person at the box office at 501 W. Main Street, Louisville, or online at www.kentuckycenter.org.  

Venue: Kosair Charities: Downtown
Date/Time: 5/18/2014
Admission: $14.75
Event: The Magic and the Wonder 2014
Las Vegas style Magic Show featuring Dan Sperry, Vegas Magician, featured in TV's Masters of Illusions and Award winner at the Magic Castle in Hollywood.  Also features Aaron Radatz, Vegas Magician, Dinky Gowen from Beach Bend Park, Ventriloquist Stephen knowles and local magicians Janice & Patrick Miller. For more information, go to www.kosair.org

Venue: Culver's of Corydon
Date/Time: 5/17/2014, 5-9pm
Free of charge
Event: Cruisin with the Culvers Car Show
-A casual/family friendly car show where you can enjoy your favorite burger and fresh frozen custard

Venue: Churchill Downs
Date/Time: 4/26-6/29/2014
Event: Churchill Downs Spring Meet
Churchill Downs offers live thoroughbred racing in the Spring including night racing under the lights.  For more information, go to www.churchilldowns.com

Venue: Waterfront Park, 129 E. River Rd
Date/Time: 5/17/2014, 4-8pm
Event: Take Steps for Crohn's and Colitis
-Gather to join the fight against Crohn's and colitis with a 2 mile stroll.  Money is being raised for crucial research while raising awareness of the painful and unpredictable digestive diseases.  Festivities will begin at 5pm and include live entertainment, refreshments, a kidzone and advocacy area.

About the Author: Scott Boehnlein, Owner/Broker of Family Realty, has made it his promise to be honest and committed to getting you top dollar in the least amount of time with the most aggressive home marketing plan available. See how we can help you at www.ViewLouisvilleHomes.com.

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Just Sold! 4631 Shenandoah Dr Louisville

Just Sold! 4631 Shenandoah Dr in Louisville

4631 Shenandoah Dr

Look at this great home we just sold in Louisville!  Family Realty can help you find your dream home and help you sell your current home in minimal time.  Get started with us today by visiting www.ViewLouisvilleHomes.com.

Click the link to learn more about Scott Boehnlein and the other Family Realty team members.  

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