So you’re ready to buy your first home in Lake Travis or Austin? It can be both an exciting and confusing time. Maybe you have some doubts about your ability to buy a home based on information from friends or relatives, or perhaps the internet. Not all the things people think about buying a home are accurate. Real estate is a constantly changing field, so you need to make sure your information about the home buying process is current. What are some of the home buying misconceptions that first time buyers encounter?

  1. You need a 20% down payment to get a mortgage.

This was accurate a few decades ago. Back in the old days, you had to pay 20% - 50% down for a mortgage and needed almost immaculate credit.  Unfortunately this limited the ability of many hard working people to own their own home. In order to make it possible for more people to own a home, the government created the Federal Housing Administration and began offering “FHA Loans”. The FHA currently will back a loan from a home buyer with a credit score of as little as 500 and a 10% down payment. If your credit score is above 580, you only need 3.5% for a down payment! Today it’s more possible for people with less than perfect credit to buy a home.

  1. You Can’t Qualify For a Mortgage With Student Loans

Lenders look at all of your debt combined and don’t single out student loans.  What lenders look at is your total debt to income ratio. That means that when you take into account all that you owe in loans and can still afford a mortgage payment, then that’s what matters.

  1. You can save money by not using a real estate agent.

Real estate agents not only make your buying experience simpler, but safer. Most people don’t know how to deal with the paperwork. Real estate agents also make their commission from the sale of the home, which is worked into the price regardless of whether you decide to use an agent. So why would you go it alone when you really won’t save money by not using one? The agent takes care of all the paperwork, appraisals, inspections, and other matters that are part of the process, so you don’t have to deal with it.

  1. It’s cheaper to buy a home that needs a lot of renovating.

It’s fun to watch those shows where they turn a worn out home into a palace. But let’s just say it’s more fun to watch than to do in this case.  After all of the time and money you put into the renovation, you may end up spending much more than if you bought a home that’s move-in ready. Save yourself the pain and chose the home in Austin that meets your needs without all the mess of renovation.

Are you planning to buy a home in the Austin and Lake Travis area and have questions about the home buying process? Please contact us today for more information. You can also search for your dream home now using our convenient home search tool.