Thinking about buying a home in 2021?  Here are a few truths for all homebuyers to help you wade through some of the misinformation out there.

NOW IS NOT A BAD TIME TO BUY

Yes, the current market favors sellers. We are in one of the best sellers’ markets in a decade, but do not let the fear of buying at the “wrong time” put the brakes on moving forward. The economic fact of life is there is never a bad time to buy a home.  That is reinforced by the fact that over time real estate builds equity that equals wealth. Interest rates are lower than they have ever been and that means less money to the bank for borrowing their money and more to the principal of your loan. Mortgages can be paid off, but the rent goes on forever and builds wealth for the landlord, not the renter.

YOU DO NOT NEED A 20% DOWNPAYMENT

Down payments vary. Twenty percent is cited because that Is the cutoff for private mortgage insurance (PMI) which adds to the monthly mortgage payment. Once the home is purchased and builds 20% equity, you can call your mortgage company to remove the PMI or just refinance.  Some programs are available to help reduce or eliminate the down payment. Spend some time researching what state and federal programs offer help to a variety of home buyers.

BUYING A HOME DOES NOT HAVE TO EQUAL HEAVY DEBT

If you focus on the amount you own, it can be overwhelming, but not all debt is bad. Make sure you can afford your monthly payment and that you are not “house poor.”  Take into consideration all of your monthly expenses, not just the ones you report to the lender on the application.  In the months, you have a little extra money, you can add it to your mortgage payment and cut the life of the mortgage significantly over time and that monthly mortgage payment gains buyers equity in the home. Equity is a financial asset the buyer can use to pay off debt, use for a down payment on a step-up home purchase, or even buy a second home.

YOU DO NOT HAVE TO HAVE PERFECT CREDIT

Credit scoring plays a big role in real estate purchases, but it does not necessarily mean a not-so-squeaky-clean credit history is a deal-breaker. There are many solutions and programs for buyers who have a less than perfect credit score. The reality is that buying a home can boost the buyer’s credit and help create a stronger financial position for future credit scoring.

Today’s market is not as accommodating to buyers as it was a couple of years ago. Still, it is not a bad time to buy for those who have done their research then partner with a professional REALTOR® to help them explore the opportunities.

NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee – Southwest Virginia region representing over 1,400 members and 100 affiliates involved in all aspects of the residential and commercial real estate industries. Pending sales, Trends Reports, and the regional market analytics can be found on the NETAR websites at https://netar.us/voice-real-estate-northeast-tennessee.