Top 5 Myths About Buying a Home That Could Cost You Thousands

Buying a house sure is a big financial decision.

Sometimes it’s easy to get overwhelmed and get caught up in the homebuying information you consume online. But did you know some of the information you are reading may be myths. From buying the wrong house to choosing the wrong mortgage option, make one mistake and you can end up paying thousands of dollars.

Don’t worry. We won’t let this be you.

We’re here to help you and make your homebuying journey easier and smoother by debunking these common myths.

Let’s dive in!

The Reality of Homebuying: The Truth to these Myths

Myth 1: Buy the most expensive house you can afford

Truth: Buy a house that meets your needs and allows you to have a comfortable financial stability

The thought of buying the most expensive house you can afford is definitely a myth.

Whoever said this did not think about the other expenses that come after buying a house like monthly mortgage payment, utility bills, and being able to live a comfortable lifestyle.

Plus, the housing market can really be unpredictable. If the property value drops, you could end up owing more on your house than it’s worth.

Myth 2: Closing costs are only paid at closing

Truth: Some closing costs, like home inspection and appraisal fee, are paid before the closing.

Closing costs are a combination of fees, some of which may need to be paid before closing.

By the term itself, most people believe that they would pay for these homebuying expenses during closing—and in one lump sum. But this is not always the case.

The reality is some closing expenses are paid upfront and out of the pockets of homebuyers—and are separate from the final closing costs.

So to save you the financial stress, ask for a detailed breakdown of all potential expenses that come with the homebuying process from your real estate agent and lender. Think ahead, do your research, and set aside a budget for any upfront costs.

Myth 3: Wait for the best time to buy a house

Truth: There’s no guaranteed best time to buy a house

This is the most common myth in real estate.

It’s extremely tricky to predict market trends. The housing market is influenced by a lot of factors like interest rates and economic conditions. So it’s difficult to wait or predict for the best time to buy a house.

The truth is you could miss out on a lot of good opportunities when you wait for the “best time.” There’s no such thing.

So if you already saw your dream house and you believe you are in a great place in your life financially to buy it, go for it.

The best time to buy is when you are financially ready and when you’ve found the right house for you.

Myth 4: A buyer’s agent doesn't cost the buyer extra money

Truth: Buyer’s agents do cost money.

Though the buyer doesn’t always pay their agent directly, there is still a cost to the buyer for using a buyer’s agent. Most commonly, a buyer’s agent’s commission is built into the home’s purchase price and paid by the seller (although commissions and payments are always negotiable). This means the buyer indirectly contributes to the buyer’s agent’s commission through the price they pay for the home.

A home seller may pay their agent a 3% commission and the buyer’s agent a 3% commission when the home sells.

For example, if you buy a house for $750,000, and the seller could pay a total of 6% in commissions, which is equal to $45,000. The buyer’s agent and listing agent would each receive 3%, which is equal to $22,500.

That’s a lot of money, right?

To debunk this myth, the buyer’s agent do cost extra money.

And this is something we have made significant improvements on for homebuyers at WithJoy.AI. When you buy a house with our AI real estate platform, you get 70% of what a buyer’s agent earns.

So, if we use the same example above, this means you get a commission rebate of $15,750 when you buy a house worth $750,000 using WithJoy.AI.

Sounds amazing, right?

Myth 5: Thinking that the 30-year fixed mortgage is the best option

Truth: Consult an expert to know which mortgage option is best for you

The 30-year fixed mortgage loan does sound financially reasonable. It’s predictable and the monthly mortgage payment is more affordable.

Most people go for this mortgage because it offers more flexibility since they are also paying their other financial obligations like student loans or childcare costs.

But if you really think about it, since this loan stretches over 3 decades, you end up paying a lot more interest over time. Think of the things you can spend on or invest in instead.

Explore different mortgage options. Just because someone said it’s the best mortgage option for them doesn’t mean it would also be the best for you.

Research about the 15-year and 20-year fixed mortgages. You may be surprised that either of these may be more suitable for you.

And if you want something more flexible and has lower initial payments compared to a 30-year fixed rate mortgage, go for an Adjustable-Rate Mortgage (ARM). This type of mortgage starts with a lower interest rate during the initial years. Usually, people who take this mortgage option are young professionals who will have a higher income in the future.

We highly suggest that you consult a Mortgage Loan Officer or a Financial Advisor to determine which mortgage works best for you.

To wrap things up

The homebuying process doesn’t have to be overwhelming.

As long as you have the right information, you continuously do your own research, and you consult the right professionals, homebuying will be easy, smooth, and less expensive for you.

Here’s to finding your dream house—without falling for these myths!

Happy house hunting ✨🏠