Are you ready to finally make the move from being a renter to becoming a home owner?  If so, you might reach out to friends and family for advice – especially if they own homes.

But be cautious – those close to you may not be the experts you think they are.  You could be taking bad (albeit well intentioned) advice without even knowing it.

So we will outline the most common misconceptions about buying a home!

Myth 1: The first step is looking for a house.  Perhaps you just want to see what is out there – to get a feel for the market.  Even if you are just browsing, you run the risk of setting your heart on something only to have it broken.  A buyer might be viewing homes that are in a higher or lower price range than what they are qualified for.

The first step is always getting pre-approved for a mortgage before you start shopping for a home – even casually – as this will determine what your budget is.

Myth 2: A 30 year mortgage is the best option.  If you think the longer you agree to invest in your home the less expensive the mortgage payments will be – it may not be the case.

Most people choose a 30-year fixed rate mortgage because the monthly payments are lower than a 15-year rate mortgage. While this is true, you could end up paying more during the life of the loan if you select the 30-year option.  This is because you are borrowing the same amount of money for twice as long – and often at a higher interest rate.  If you are more interested in paying down the house versus the interest then the 15-year is a great option.

But keep in mind other home loan options like an adjustable rate mortgage – especially if you aren’t planning on staying in your home for 5+ years.

Myth 3: The down payments has to be 20%.  A 20% downpayment is ideal if you want to avoid private mortgage insurance (PMI) – this allows you 20% equity in you home and your lender no longer requires it.

But many lenders will offer up loans with 5% or 10% down if you are willing to pay the monthly PMI (which is eliminated once you have 20% equity).

Or you can go to the Federal Housing Administration (FHA) for a government backed loan with only 3.5% down.  There are also local, state and federal program options for down payment assistance.

Myth 4:  The down payment is the only up-front cost.  Buyers are often responsible for closing costs which can range from 3% to 6% of the purchase price.  And there are filing fees, taxes, attorneys fees, inspections, credit reports, home owners insurance and title insurance.  Make sure you are clear on all of these expenses.

Myth 5:  You cannot buy a home with bad credit.  It might be a problem if you were looking to get a conventional loan.  However FHA loans only require a 3.5% down payment and borrowers with low credit scores – even under 600 – can qualify.  So there are some options.

Myth 6:  A home inspection is not necessary.  In a competitive sellers market you might consider skipping this step to make you offer more desirable – especially if you are concerned about losing a home you really want.

But be cautious – sellers are hoping you will skip this crucial step.  It means you will get the home ‘as is’ – including any and all problems that come with it – and most concerning are the problems that are not visible or have not been disclosed.

It makes sense to spend the money for a very thorough home inspection.

Myth 7:  The asking price is set in stone.  Much like buying a car – the offer you make on a home does not need to be the asking price.  If you have wonderful credit, a pre-approval and the down payment in hand – sellers will be more willing to negotiate with you on price.  Plus, if your home inspection turns up issues – you can leverage those to your advantage in negotiations.

Myth 8:  As a buyer you don’t need an agent.  You might think you can manage this home buying process solo – because, isn’t that what the internet is for?

This is where we tell you to resist the urge to buy your first home yourself or go directly to the sellers agent to put in your offer (they represent the seller!)  Call a Realtor instead – they are the pros who bring their expertise to the transaction – everything from negotiating, paperwork, providing resources every step of the way to turbocharged searching power(yes, they have tools to see stuff you can’t).

Myth 9:  If you don’t have kids then schools don’t matter.  When you find a house you love and it’s in your price range you want to move fast!  However the neighborhood you choose matters – both now and later when you might want to sell.  Even if you don’t have children – good schools are typically a sign of a good neighborhood.