Just to clear up some common myths about home buying:
Myth 1. Homes will appreciate by about 7% per year.
Reality: In a normal market home values have historically appreciated 2-5% per year depending on location. Right now we are not in a normal market and home values have decreased.
Myth 2. A buyer will have to purchase private mortgage insurance on any home, regardless of the down payment amount.
Reality: Private Mortgage Insurance (PMI) only has to be purchased if the down payment is less than 20% of the purchase price.
Myth 3. The purpose of the home appraisal is to determine if a home is in good condition.
Reality: The appraiser determines the home's value. The condition of the home is determined by a home inspector, which is the reason that all buyers should have a home inspection.
Myth 4. Buying homeowner's insurance is optional.
Reality: A lender will require the buyer to purchase homeowner's insurance.
Myth 5: The home is owned by the buyer when the purchase contract is accepted and signed.
Reality: Once the purchase agreement is signed, the closing process begins. The buyer takes title to the home at closing and this is when the buyer takes ownership.
Have any myths you have heard?
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