Common Real Estate Myths Debunked

The world of real estate is riddled with myths that can leave both buyers and sellers feeling overwhelmed and confused. In an industry where every decision involves significant financial implications, it's important to distinguish between myths and facts. Whether you're a first-time homebuyer or simply curious about the housing market, understanding the truth behind these myths can save you time, money, and stress.   You need 20% down to buy a house. Contrary to common belief, putting 20% down when buying a home is not required. With a 20% down payment, lenders will not require mortgage insurance, which protects the lender if you cannot pay your mortgage. However, you can put as little as 3.5% down on a home through programs such as FHA mortgages. Do not let this misconception stop you from buying a home!   Buy the nicest house in the cheapest neighborhood. This piece of advice gets thrown around a lot in the real estate world, and it does not hold a lot of truth. Buying the nicest home in an affordable neighborhood can make it much harder to sell down the road. The nicest home in a neighborhood may also have very little room for adding value, while an average home will see improvements that add much more value. Lastly, the neighborhood may not improve, and you are likely to see a bigger increase in value from buying a less expensive home in a nicer neighborhood.   Working with a realtor is a waste of money. Many people underestimate the value of a real estate agent. Whether you are buying or selling a home, a real estate agent has the expertise and experience to get you the best deal and make the process as smooth as possible. The facts speak for themselves: an independent study in 2016 found that homes for sale by owner sold for 5.5% less than agent-assisted sales. When it comes to buying a home, agents have access to MLS, professional negotiating skills, professional contractor relationships, an objective viewpoint, and years of experience to guide you toward your dream home.   Getting pre-approved for a mortgage will hurt your credit. Many people believe that getting pre-approved by a lender will hurt or even ruin their credit score. The truth is, getting prequalified is considered a “soft hit” and has minimal impact on your credit score. Applying for a pre-approval does cause a hard pull on your credit score, which will drop it from one to five points. If multiple pre-approval applications are submitted in a short period of time (typically two weeks), it will likely only count as one hard pull on your credit. If you are shopping around for a mortgage, ensure applications are done in a short period of time to limit the impact on your credit.

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6 Ways Buyers Can Save on Their Mortgage

Photo Credits: Kindel Media With mortgage rates on the rise, it’s easy to feel extra financial stress when buying a new home. In the past month, mortgage rates have hovered around 7%. They are predicted to fall in the second half of the year, but affordability continues to be an issue when buying a home. Here are 6 ways homebuyers can save on their mortgage and afford their dream home.   Shop around: Credit: Alena DarmelTens of thousands of dollars can be saved from shopping around and getting quotes from multiple different mortgage lenders. Different lenders have different qualifications and standards used when deciding who to lend money to, which is why the exact same person can get such different quotes from other lenders. Make sure you get at least two different quotes, but keep in mind that buyers who get five or more quotes can save almost three times as much money over the lifetime of their loan then those who get two quotes.    Negotiate:While you may know it's standard to negotiate the price of your new home if necessary, many people do not consider negotiating a mortgage rate. The amount of room to negotiate a mortgage can depend on the lender but some lenders will consider negotiating on either the rate or the closing costs. One way to improve your negotiation is to show quotes from other lenders and ask for a better rate from them in order to keep your business. Do not be afraid to ask for a better rate, it never hurts to ask!   Buy down the mortgage points:Mortgage points are a type of prepaid interest, meaning you can choose to pay more upfront and receive lower interest rates and monthly payments. The downside to this is that it costs more upfront; however, if you have the money to pay extra to buy down mortgage points you can save money in the long run. When considering whether buying down mortgage points is for you, ensure you have enough money saved that spending the extra money on points will not deplete your savings past a point you are comfortable with.   Ask for discounts: Few people know that banks can sometimes offer “relationship discounts” to customers that already bank with them. These discounts can include waiving the loan processing fee or a certain percentage off of your loan. Ask your bank if they offer any relationship discounts before you sign your mortgage!   Watch out for float-down policies: A float-down option in a mortgage allows the borrower to adjust their rate downward if mortgage rates decrease during the closing timeline. Different lenders have different rules regarding their float-down policy, so make sure you ask what your lenders are before you have locked down your mortgage with them. Some policies include charging a percentage of your loan amount as a fee if you switch to a lower rate. Educate yourself on the float-down policy for the different lenders you are considering!   Consider the terms: Although a 30-year mortgage is the most common length for homebuyers, a 40-year mortgage may also be offered by some lenders. A longer loan saves you money on your monthly payments, but you will likely be paying more interest in the long term. You also may be able to get an adjustable-rate mortgage, which starts with a lower interest rate and then resets to the current rate every 5 to 7 years. Refinancing a loan down the road when there are lower interest rates is another thing to consider. 

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Why Fall is a Great Time to Sell A Home

Credit: Vlada Karpovich Fall is just around the corner in Boise. The leaves begin to change and the fall smells fill the air. Although the spring market is always spoken about as the best time to sell a home, at Lysi Bishop Real Estate we find the Fall market to be one of our favorites.   Serious buyers are in the market: Many buyers sense the change in season and want to nest just in time for the holidays. This can work to your advantage as a seller because the buyers looking at your home will feel an urgency to choose to move in before the snow hits.   Autumn can add ambiance to your home: Fall colors can make a house feel homey and cozy. Autumn smells in the air and a fireplace going can help buyers envision themselves living in your home. Trees full of leaves changing color can also add to the curb appeal of your home! Just make sure to keep leaves on the ground raked and the gutters clear.    Less competition: With fewer homes for sale in the fall, your home has a better chance of standing out.  Quicker sales can occur because businesses such as home inspectors and mortgage lenders will have fewer customers, and therefore be able to prioritize your home more. This is a major advantage with the fall market!  

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