Buying a house in Santa Cruz? If you’re looking into the possibility of buying a home, you may enter that situation with some preconceived notions that are either out of date or incorrect. To build your confidence with accurate information, here are 6 misconceptions people have about buying a house in Santa Cruz:
Twenty Percent Down Is Required
When it comes to a required down payment, the amount depends on the type of loan you will be receiving.
Conventional mortgages normally require three to five percent down, while VA and USDA loans require no down payment.
The reason you are often told to put twenty percent down is this then avoids you paying Private Mortgage Insurance – or PMI – on top of your monthly mortgage payment. Do note that VA loans do not have PMI and, while USDA loans do not have PMI, they do have separate insurance deposits you need to pay.
Your Credit Score Is Everything
Credit scores do determine a lot these days, but your income and the amount of debt you are currently dealing with relative to your income are also large factors that decide your loan application’s fate and your resulting interest rate.
We do recommend getting your free annual credit report and doing whatever you can to clean up your credit history and correct any inaccuracies prior to applying for any loans. You’re aiming for a minimum credit score of 740 to be in the “very good” range when buying a house in Santa Cruz.
Each Party Always Pays Their Closing Costs
Both buyer and seller will have closing costs to pay once everything is said and done, but closing costs can be used as a bargaining chip during negotiation.
A buyer offering to pay the seller’s closing costs can be a powerful offer that seals the deal. This typically saves the seller about five percent of the sale price of their home, an amount they would otherwise lose once the deal is finalized.
Every House Is Purchased As-is
Too often, buyers go to a showing under the assumption that what they see is what they get.
If you’re interested in a property, bring up repairs or minor modifications that you feel are necessary to get the property in a reasonable condition. This can mean anything from essentials such as meeting building codes up to requesting the buyer leave window treatments or appliances.
It’s up to the buyer if they’re willing to accept your offer or counter if they feel there is some wiggle room in which to work with you.
Agents Are Expensive and Overrated
Anyone who feels their agent was overpriced and useless did one of two things: Hired the wrong agent for them, or failed to be assertive and get what they wanted from their agent.
When you’re looking for an agent, don’t just hire the first one recommended to you by friends or family. Shop around, meet with a number of agents, check their references, and then hire the one that you feel the most comfortable with and you feel is the most motivated and knowledgeable to help you when buying a house in Santa Cruz.
Once you have hired your agent, stay in constant contact with them to make sure you’re both on the same page, and keep focused on your home buying goals. And don’t forget that any agent that wants to work with you will negotiate their commission.
Homebuyers – especially first-time home buyers – usually feel a level of pressure they put on themselves to find their exact dream home right away.
Chances are you will find a property that meets your needs, and you then mold through upgrades over time to fit your wants. Give yourself a chance to think of what you can do with a property to turn it into your dream home rather than chase the listings for something that may never materialize on its own.
Agents to Help You When Buying a House in Santa Cruz
If you need some guidance and support when buying a house in Santa Cruz, contact us today at 831-588-2334!