When it comes to purchasing a home, many people have common misconceptions about their mortgage options, up-front costs, home inspections, negotiating needs and more. We’ll help you bust the myths for buyers and open their eyes to the facts about homeownership to streamline the purchasing process.

Myth #1: The process starts by shopping around for a house

Perhaps, before your clients have even contacted you, they’ve already found the “perfect home,” that’s painted in the “perfect color” in the “perfect neighborhood.” While it’s natural for home buyers to want to browse around and get a feel for what they might like, you already know that’s not what they should be looking at first. Instead, they should take a closer look at their credit and make sure that it’s as close to “perfect” as they can get it. This will be the first step in getting pre-approved for a mortgage. And once they know what they’re pre-approved for, they’ll have a better sense of their budget and where and what they should be considering in terms of their “perfect home.” This will save you both a lot of time and potential heartache when they realize they can’t afford that house they fell in love with.

Myth #2: Bad credit is a total deal breaker

Despite what we just explained in Myth #1, it’s also important for your clients to know that even if they have bad credit, they still have options. Conventional loans may not be available to them, but FHA loans only require 3.5% down. Even those with credit scores under 600 may qualify. That said, FHA loans do have potential drawbacks that may not make them right for everyone. As with any loan, helping your clients understand their options is key.

Myth #3: You can’t put down less than 20%

While it may be considered ideal to put down that amount, your clients may be relieved to hear that a 20% down payment isn’t always required. Of course, then you’ll need to let them know about private mortgage insurance (PMI). But if they can find a lender who is willing to allow a 10% or even 5% down payment, they may be happy to pay PMI insurance to make their dreams of home ownership come true.

Myth #4: The down payment is your only up-front cost

Even though that may be a significant amount of money for your homebuyers, they may assume that’s all they’re responsible for up front. As an experienced real estate professional, you know that the seller may — and often does — negotiate for buyers to pay the closing costs. This percentage can vary widely from state to state, so they will have to budget for that as well. Not to mention the other fees, taxes and associated costs of insurance, home inspection, credit report, etc.

Myth #5: A 30-year mortgage is always best

Clients may not understand that if they’re not set on staying in their home for the long haul, a 30-year loan might not be their best option. Of course, you can explain that most people opt for a 30-year fixed rate mortgage to help keep their monthly payments lower than with a 15-year fixed rate mortgage. But they may not realize that with a 30-year mortgage, they are simply borrowing the same amount of money for twice as long at a higher rate. It’s possible they could actually pay more during the term of the loan with a 30-year fixed loan. In other words, there’s no one mortgage option that’s always best. You can help open their eyes to other loan plans, even an adjustable-rate mortgage, that might be best for their particular situation.

Myth #6: If you don’t have kids, schools don’t matter

It’s easy to see why some homebuyers might believe this, but it’s also easy to dispel.

Once buyers understand that good schools reflect the neighborhood and add value to the area, they’ll see how it affects the value of their home. With schools come families. And with families come other amenities that make a neighborhood desirable. This can be important when they go to sell, potentially years from now.

Myth #7: Home inspections aren’t that important

Naturally, you know that the cost of a home inspection is often money well spent by clients. Of course, it’s their prerogative to waive it, but they may not realize what they can’t see could come back to haunt them and could potentially cost them more than an inspection ever would. Plus, sellers can sometimes count on the fact that all looks great on the surface and they can find a buyer who will purchase the home “as is.”

Either way, let them know that an American Home Shield® Real Estate Home Warranty can be a wise choice to help protect their budget and their new investment.

Myth #8: The asking price is set in stone

Of course, your clients know you can help them negotiate; that may be one of the reasons they are working with a professional. But they may not realize how much or which things can help persuade the seller to be more open to lowering their asking price…things like top-notch credit, being pre-approved, that there are no contingencies and the closing date is flexible. Plus, the findings from the home inspection you recommended can ultimately reveal some negotiation room.

When you help bust these common home buying myths for your clients, you’re helping them make informed decisions about one of biggest investments they may ever make.

For more helpful tips, visit the American Home Shield® Home Matters blog.