Buying a home is a big deal – probably the largest financial transaction of your life. And everyone will have advice for you, from family to friends to coworkers to complete strangers. The problem is, though, that a lot of that “advice” is flawed or just sheer myth. And when doing something as big as buying a home, you certainly don’t want to proceed on the basis of misconception and myth. To help you avoid that trap, we’ve compiled these 5 myths people often believe about buying real estate in San Diego.
1. The down payment has to be 20% of the sale price.
That was the case long ago for buying real estate in San Diego, but not so much now. Surveys show that nearly half of renters still believe they need to pay 20% down in order to buy a house. But that just not true with all the available lower-income and first-time buyer programs. FHA loans require only a 3.5% down payment, and VA loans have no down payment requirement for qualifying borrowers. In fact, if you purchase private mortgage insurance, you can get conventional mortgage loans that offer down payment options of 3% to5%.
2. Your credit has to be pristine.
This is another myth about buying real estate in San Diego that many people buy into without questioning it. Most lenders require a credit score of about 620, which isn’t terribly high. And you can get an FHA loan with a credit score of only 580. In addition, there are quite a few alternative credit sources for home buyers whose credit is in really bad shape and don’t have the time to bring up their FICO score. And today student loan debt doesn’t present an insurmountable obstacle either, just so long as you can show proof you’re paying on it.
3. You should wait until the market’s in your favor.
A lot of people will advise you to wait till the market is just right before buying real estate in San Diego, but that’s just another myth. The real estate market is almost impossible to predict and difficult to time. Only in retrospect do market watchers have any real understanding of market trends. So the best time to buy is when you’re ready – emotionally, family-wise, and financially.
4. Buying a fixer-upper is cheaper.
Buying a fixer-upper may cost a lot less initially, but it can wind up costing much more in the long run. Unless you’re a contractor or have scads of experience in the construction trades, you really don’t know how much work and money are required to put that fixer-upper right. And if you do hire a contractor to make the needed renovations, just remember that they don’t come cheap. In many cases, the cost of renovations will outweigh the purchase-price savings. And don’t forget to factor into the cost all the time and headache and permits.
5. You don’t really need an agent.
This may be the most dangerous myth for people buying real estate in San Diego. Sure, you can buy a house without a real estate agent – many people do. But that commission your agent charges is a very small cost for all the expertise and experience she can bring to the table. With all the online listing sites and online real estate marketplaces, you may be tempted to go agent-less. Just remember that a good agent is a partner and ally who will be looking out for your best interests – to help you get the best deal and get the most value for your money.