5 Tips for Buying a Home in Today’s Market
With so much misinformation out there about buying a home in today’s market, we wanted to dispel some common myths you might have heard. This week on the Tax Talk with Hey Hey podcast, we interviewed expert lender Eliana Eldhamy from Viewpoint Lending.
Here are the top 5 things NOT to believe when it comes to purchasing your next home:
Myth # 1: You should wait until the interest rates are lower.
It might seem like today’s interest rates are high in comparison to what they were a couple years ago, but here’s the good news:
You can always refinance your home loan once interest rates inevitably go down. Remember, the economy is cyclical: what goes up will eventually come down, and that includes today’s interest rates. We don’t know how long it’s going to take, but history tells us it’s bound to happen eventually.
However, when it comes to that dream home you have your eyes on, it will probably not be available if you wait a few years or even a few months. You may not find the same kind of property at this price point and location.
So if you are able to get approved for a loan and can manage the monthly payments, don’t be afraid to go for it. Remember, the dollars you keep in a savings account are always going to depreciate over time, but real estate will only grow in value.
Myth #2: You need 2 years of tax returns to get approved for a home loan as a self-employed individual.
While it might be trickier to get approved for a home loan if you don’t have a traditional W-2 income, it’s certainly not impossible.
One alternative to a traditional loan is a business bank statement loan: this type of loan considers your gross business income in terms of money deposited into your business bank account instead of your take-home pay from the business. While these types of loans will usually have considerably higher interest rates, you can always refinance your loan in the future once you can show consistent take-home income.
Myth #3: The little things matter when picking your primary residence.
When choosing your primary home, it’s hard to keep emotions out of your decision-making process.
That being said, the best thing you can do to set yourself up for financial success is to look at your primary residence purchase as an investment.
Approach it with a business mindset, and remember that the little things don’t matter as much as the bigger picture: you can always change out the doorknobs you don’t like, but you may not be able to find a home like this in your preferred location anytime soon.
Myth #4: The Fannie Mae/Freddie Mac loan adjustment on May 1st favors those with a lower credit score.
This one is simply not true. It’s still harder to get approved with a lower credit score than a higher one.
For more information on why that is, check out this helpful article HERE:
Myth #5: You have to figure it all out on your own.
Just because you can do it alone, doesn’t mean you should. When making a big decision that will continue to affect you for the rest of your life, talking to the experts is invaluable.
We all have goals. We know where we want to be ideally headed.
Get yourself the right team to help get you where you need to go.
Not only will things be easier, they’re also going to be faster.
At Prominence, we’re here to be part of that team for you. We work hand-in-hand with each one of our clients to make sure we are helping them get where they want to be going with their money.
Finances are a tricky and sometimes touchy subject, but you don’t have to face it all on your own.
If you or someone you know is looking for one team to outsource their bookkeeping, tax prep, and IRS communication to, we ask that you please send them our way.
Just send them the link down below to schedule their free discovery call with us today.
See you in the next blog post!
We look forward to meeting you! See you in the next blog post.
Warmly,
The Prominence Team
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