In the Market: A refresher on down payment facts
This feature is a real estate news and information roundup from a millennial’s point of view. When a young professional moves from Indianapolis (median home price $125K) to San Francisco (median price $1 million), you can expect an adventure. Nneka Madus, an analyst in Bank of the West’s Mortgage Division, did just that and has plenty to share in her quest to own a home in San Francisco.For as long as I’ve been blogging for Bank of the West, I’ve found that often homebuyers are somewhat clueless about the mortgage process — particularly about cash down payments. A lack of understanding about how much is needed for a cash down payment can trip up first-time homebuyers, which isn’t so good since coming up with a cash down payment is one of the first steps! Believing you need 20% cash down is one of the big misconceptions that I’ve tried to debunk through this blog and is one myth Rob Chrane highlights in his guest article for HousingWire. How much you need for a cash down payment is just one possible misconception that may keep potential homebuyers on the sidelines, even when the time may be right to jump into the market. A quick lesson on mortgage terms: preapproval and prequalification. If you’ve been doing your homework, you’ve probably seen these terms thrown around as something you may want to explore before starting the mortgage process. My two takeaways from Scott Sheldon’s credit.com blog? Getting prequalified is OK, but getting preapproved is better! But, not all preapprovals are created equal. Getting familiar with the difference between the two terms and understanding the nuances of preapproval may help add confidence — and subtract stress — from your homebuying process. The saying “Don’t count your chickens before they hatch” has some real significance in the real estate world. Remember, your mortgage isn’t official until it is signed. This is one of several unexpected homebuying lessons Rachel Stults uncovers in this realtor.com article. Instead of going the typical newbie homebuyer route by figuring things out the hard way, I’d recommend checking out Rachel’s list of well-kept secrets.