Mythbusting: First Time Home Buyers in Raleigh, NC

Mythbusting: First Time Home Buyers in Raleigh, NC

Buying a home for the first time, while stressful, should be exciting. But when headlines report rising home prices and high interest rates, the process can feel overwhelming, especially when pervasive myths infuse the process with fear and uncertainty. Don't freeze! Take the time to navigate through the myths in order to understand what you really need to know before you buy a home.

Here are five of the most common myths about home-buying right now, and the truth behind them.

Myth 1: The rates are too high, and I'll be locked in forever.

It's true that mortgage rates have risen in recent months, but they are still low by historical standards. While that may not be comforting to home-buyers who long for rates lower than 5%, there are other factors to consider.

First, many home-buyers, especially first-time home buyers qualify for special rates and programs. Licensed Realtors will have information on programs that may keep more money in your pocket. Cindy Poole Roberts, Raleigh Realtor and founder of Merriment Realty, notes that Realtors can help clients find programs, incentives, and will partner them with trustworthy lenders. Also, she reminds clients that rates are not "forever."

She said, "You can always re-finance at a later time when rates come down and you will be building your credit score. But paying rent is like paying 100% interest every month! By getting into a house, you can start building equity, and you will not be throwing that money away every month."

Myth 2: I need to put 20% down.

In previous generations, this myth became cemented as both common sense and best practice. However, reality has changed, both in home prices and in rental prices. Not only are there the special lending programs, as mentioned above, but mortgages and lending practices are vastly different than they used to be.

A danger now can be paying too much in rent, waiting to save, and losing the chance at equity. That's not an encouragement to buy more house than you can afford; it's encouragement to make sure you understand both the hurdles and opportunities in today's market, instead of relying on generations-old advice.

Myth 3: It's not worth it to buy right now.

Both the home prices and the rates make many people continue to say, "just not right now."

David Burke and his fiance have been keeping their eyes out for the right home for them to begin their lives together. They met with Cindy and walked through both their hopes and their misgivings about the market right now, including costs, rates and ensuring they find the right home for them. However, Burke noted, it might come down to a gut feeling.

He said, "I value my routine here and what I've been able to do in the community. I don't want to uproot every single thing or make my commute hours a day because the Raleigh market is more expensive. If my fiance and I both loved a home and it felt like home and we could see ourselves there and it just came down to a heart feeling from the both of us, we would buy. All those external factors are external. And you can't control what you can't control."

Cindy added there is good news to remember as well. The industry in the Triangle only continues to build and Cindy doesn't expect anyone will be losing value in the near future. "Of course no one has a crystal ball, but if you look at a graph of our home prices in the Triangle, you will get an idea of what we can expect," she said.

Myth 4: I need a perfect credit score.

While a good credit score is important, it's not essential for getting a mortgage. The worst thing you can do is take no action at all.

"There are a wide variety of loans available for buyers with different credit scores. A lender will be able to inform you of your options and guide you, even if that means working to get your scores improved so buying a home in the near future is an option," said Roberts.

Myth 5: You don't need a Realtor.

While it's true, you don't 'need' a Realtor, it's important to remember the right Realtor is not just a 'sales agent,' they are your advocate.

Burke noted that even though he wasn't ready to buy, Cindy took time to be with them. "She gave us a lot of knowledge about the whole process. We all have busy lives and don't have time to take up real estate on the side. She gave us a wealth of information and helped us better guide our decision making process." He added, "I would say it is very important to get involved with somebody you can trust. Cindy just said, 'Hey, I'll be here when you need me.' That's what's been very comforting for us as we go through this process."

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