3 Terrible Mortgage Myths
ryan | September 5, 2017
3 Terrible Mortgage Myths Debunked.
3 Terrible Mortgage Myths.
If you haven’t watched the Game of Thrones, we wonder where you’ve been. GOT has snared the general cable customer with its storytelling of a medieval fantasy epic.
The actors who portray the various characters as well as the directing sometimes lead viewers to temporarily transcend their belief and actually think the characters are real. But they’re not. As good as the story is portrayed, it is still a myth, at best.
A good myth, but a myth nonetheless. Another place to look for myths that just don’t seem to go away has to do with financing a home. For those that have never obtained a home loan or haven’t for quite some time, may be reaching their own conclusions which are keeping them from buying.
Below are 3 Terrible Mortgage Myths. These myths can create a tremendous amount of confusion for future home owners.
Perhaps the most pervasive myth is how much someone needs for a down payment.
Myth #1: You Need 20% as a Downpayment.
No, it's not 20%. This 20% down requirement applies to conventional loans but even these mortgages accept a down payment as low as 3.0% when accompanied with a monthly mortgage insurance policy. Government-backed loans such as VA, FHA and USDA require little to nothing down as well.
Another myth is the concept of a prequalification. A prequalification and a preapproval are indeed two different animals and if you only have a prequalification letter in your hand, it’s very possible your real estate agent will ask for you to return to your lender and get the preapproval letter which requires a review of income, credit and assets.
Myth #2: All Mortgage Lenders are Alike.
That’s not true. While most mortgage companies can access most mortgage loan programs there are lenders who can specialize in a certain market segment or have access to a loan product not many other lenders even know about.
Myth #3: Buyer's Can't Get a Mortgage Due to Credit History
Finally, there is a pervasive myth that buyers today can’t get a mortgage due to their supposed credit history. That’s a big mistake.
Mortgage lenders use an automated underwriting system and can pick up certain loan programs that can fit a borrower’s profile, even with credit that’s not exactly perfect.
The point with this misconception, is to let a loan officer determine whether or not you can qualify for a mortgage. Don’t simply rely on some website somewhere as you try and qualify your own situation.
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