By Chad Taylor, the Taylor-Made Team
When it comes to buying a home, a surprising number of people are making major financial decisions based on advice that is outdated, incomplete or simply wrong.
The housing market is difficult enough right now without buyers creating additional barriers for themselves.
Affordability is a real challenge. Home prices are higher. Interest rates matter. Monthly payments matter.
But some of the things keeping would-be buyers on the sidelines are not actually requirements at all.
Here are three I hear often.
You need 20% down.
This may be one of the most persistent misconceptions in real estate.
Putting 20% down can certainly have advantages. It may help reduce your monthly payment and, depending on the loan, eliminate mortgage insurance.
But it is not a requirement to purchase a home.
Some conventional financing options allow for as little as 3% down. FHA loans may allow for as little as 3.5% down, while eligible VA borrowers may be able to purchase with 0% down.
There are also down payment assistance programs available to some buyers.
The bigger issue is that if someone believes they need to save 20% before even considering buying, the finish line can keep moving farther away as home prices increase.
The right question is not, “Do I have 20%?”
It is, “What options are actually available to me?”
Your first home needs to be your forever home.
This one may be becoming more common.
Buyers sometimes approach their first home as though it needs to solve every housing need they may have for the next 20 or 30 years.
They want enough bedrooms for future children, the perfect school district, a large yard, a home office, plenty of storage and room to grow.
There is nothing wrong with wanting those things.
But your first home does not necessarily need to be your forever home.
Sometimes it just needs to be your “for now” home.
Leah often says your first home teaches you what you like and what you do not like. In that way, it is a little like your first major relationship. You learn what works for you, what does not, and the next time around you are better equipped to choose a better partner. Or, in this case, a better home.
A first home can be a stepping stone. It can provide a place to live while you build equity, learn more about what matters to you, and eventually position yourself to purchase the next one.
Too often, buyers compare an attainable first home to the home they hope to own someday.
Of course the starter home loses that comparison. It was never supposed to win it.
You need to fit a certain life stage before buying makes sense.
For a long time, homeownership was often presented as part of a very specific sequence.
Get married. Have kids. Buy a house.
But families and households come in all shapes and sizes today.
Maybe you are married. Maybe you have a longtime partner. Maybe you are single. Maybe it is just you and three golden retrievers taking over the couch.
None of those situations makes homeownership more or less legitimate.
The decision to buy should have much more to do with your finances, your lifestyle, how long you expect to remain in an area and whether ownership fits the life you are actually living.
You do not need to wait for some traditional milestone before you are “ready” to own a home.
The opportunity to build equity is not reserved for one type of household or one version of family.
None of this means everyone should buy a home.
For some people, renting is absolutely the better choice. There are plenty of reasons to wait.
But those reasons should be based on your actual circumstances, not a rule you heard years ago that may not have been a rule in the first place.
The better path is to understand your options, decide what fits your life today, and make the best move for where you are now.
Homeownership does not have to follow someone else’s timeline. It just has to make sense for yours.
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