First-time homebuying myths disputed

 

HONOLULU ADVERTISER   October 29, 2006

BY LISA SCONTRAS

Custom Publishing Group

 

Experts say buying as soon as possible is the best strategy.

 

 

You’re not really into speculation, day trading, condo flipping or get-rich-quick schemes — you just want to buy a house, establish some roots and invest your hard-earned money in a modest home instead of putting it into your landlord’s pocket. What’s stopping you?

"Buying a home can be a powerful tool in building a secure future for you and your family.

Granted, if you have no job, no income and only pukas in your pocket, you may have trouble qualifying, even for today’s bargain-basement mortgages. On the other hand, if you have a reasonable financial history and a steady job, you may be able to take advantage of some low-down-payment financing programs and land your first home once you see past some of the first-time homebuying myths.

Myth 1: You need to have a big down payment.  Not true. Today’s financing options include a variety of programs — some requiring very little cash or none at all. In fact, seven out of 10 first-time home-buyers make a down payment of 10 percent or less.

Myth 2: With the median price of homes on Oahu at $620,000, prices are too high, especially for first-timers.  Wrong again. Toan Doran, Realtor Associate with Prudential Locations LLC, reminds buyers that the “median price” means that half the homes are selling for more than $620,000 — and, more importantly, half are selling for less.

Myth 3: It’s not a good time to buy.  On the contrary, according to experts who list several reasons that support why it’s a great time to buy.

“Interest rates are still at historic lows,” says Doran. “Low rates equip buyers with greater buying potential.”

 

Additionally, the buying environment is positive. Making an offer on a property a year ago may have meant competing with five other buyers in a bidding war —the winner agreeing to pay significantly more than the asking price. But that has changed.

“Buyers have the best of both worlds right now with low rates and higher inventory,” he says.

 

Doran suggests the fourth quarter may actually be the best time to buy because there is less competition, sellers are more anxious to sell before the holidays and buyers can still reap the tax benefits for closing this year.

Anders Hostelley, branch manager with Wells Fargo Home Mortgage of Hawaii LLC, advocates the time to buy is now and quotes best-selling author David Bach.

“Because home prices almost always go up, buying as soon as you’re able is typically a better strategy than trying to time the real estate market,” says Hostelley.

 

Myth 4: The whole process of buying a home is complicated and intimidating.

Not when you have a good Realtor and a good loan officer walking you through the process.

“We want to make buying your first home as easy as possible,” says Hostelley. “Your mortgage consultant will help you through each step of the financing process, so you’ll never have to go it alone.” A less-than-perfect credit history doesn’t have to stand in your way either, according to Hostelley.

“Wells Fargo has helped thousands of individuals move beyond credit challenges into homes of their own,” he says. “Our goal is to help you succeed financially. Buying a home can be a powerful tool in building a secure future for you and your family.”

 

Doran encourages first-timers to start small.

“We all can’t buy that dream home on our first purchase,” he says. “But if you take baby steps buying real estate now, eventually you will be able to parlay your equity into that dream home. But you have to take that first step.”

 

If you’re willing to start small — maybe a condo — and develop both a disciplined financial plan and a failure-is-not-an-option attitude, you can do it.

 

 

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