How much does it cost to BUY a home?
How much does it cost to buy a home? No, it's not just the list price.
So you're thinking about buying a home and fulfilling the American Dream. Countless hours on Zillow have inspired you to move up, downsize, or buy your first home. Now, the important part. Understanding all costs involved to buy your next home. And no, it's not just the list price.
Chris Lord of Caliber Home Loans and I discuss how to determine how much house you can afford, downpayment considerations, earnest money, and other closing costs.
MYTH #1: I CAN'T BUY A HOME BECAUSE I HAVE TOO MUCH STUDENT DEBT
- Americans owe over $1.4 trillion in student debt and the average graduate over $37,000
- This is an issue that the lending industry has been addressing, so different loan programs look at student debt differently.
- The lump sum of debt may not be factored in when buying a home.
- A lot of people think "I have this revolving debt, I can't qualify for anything," when in fact you can.
- Don't be intimidated if you do have student debt - it's always good to at least talk to someone like Chris to determine options.
MYTH #2: MORTGAGES COST MORE THAN RENTING AN APARTMENT DOES
- The average rent in Seattle ~$2,100 - why would it make sense to get a mortgage when i'm paying LESS or the same with a mortgage?
- How can you afford NOT to get a mortgage when paying this in rent?
- Home prices grew ~13% since last year. So a $500,000 house grew $65,000 in equity.
- At half this appreciation, it makes more sense to get a mortgage.
- You're growi ng your wealth, not someone else's.
- This on top of taxes, growth potential; getting a mortgage makes sense.
MYTH #3: I NEED 20% DOWN TO BUY A HOME
- If we use the $500,000 example; 20% down is $100,000. You want to travel, you're just getting going in your career, your parents aren't going to give this to you. How in the heck do you come up with this type of money?
- The reality is about half of the families buy a home with less than 20% down and there's multiple programs that allow you to do it.
- Even in the Seattle market, you can win with less than 20% down.
- Don't fret, don't be intimidated; you don't need 20% down to buy a home.