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Mortgage Myths
Buying a home can be overwhelming enough as it is, even when you think you know all the facts. There are tons of mortgage myths floating around out there that can scare people from even considering a mortgage. Hang with us in this blog post as we debunk the top mortgage myths!
Mortgage Myth #1: You Need a 20% Down Payment
One of the biggest mortgage myths we hear is that you need a hefty 20% down payment to even think about buying a home. Luckily, that’s not the case. There is a plethora of financing options available nowadays. Many loan programs offer down payment requirements as low as 3% or even 0% for eligible buyers.
Mortgage Myth #2: Applying for a Mortgage Hurts Your Credit
The fear of damaging your credit score by applying for a mortgage is a valid concern. But here’s the scoop: while multiple credit inquiries can have a temporary impact, credit bureaus understand the concept of rate shopping. They treat multiple mortgage inquiries within a short period as one single inquiry, minimizing the effect on your credit score.
Mortgage Myth #3: You Need to Find a Home Before Applying
Think again! Getting preapproved for a mortgage can actually streamline the home-buying process once you do have your dream home picked out. Preapproval also provides more clarity on your budget. This lets you narrow down your sights on the homes you can afford. Preapproval also strengthens your position as a serious buyer in the market, making you more attractive to sellers, especially in today’s competitive market.
Mortgage Myth #4: It’s Cheaper to Rent
Renting can often seem like the cheaper option but in reality, when added up over time, that’s not the case. Homeownership offers several long-term benefits as well. Homeowners build equity over time, benefit from tax deductions, and enjoy stability and potential property value appreciation. Sometimes a mortgage payment can even be lower than your monthly rent!
Myth #5: You Must be Debt Free to Buy a House
Many Americans have debt and this doesn’t necessarily disqualify you from homeownership. Lenders primarily assess your debt-to-income ratio (DTI) to determine eligibility. If your DTI falls within acceptable limits, you can still qualify for a mortgage! Don’t let this mortgage myth stop you from finding your dream home.
Myth #6: You Can’t Pay Off a Mortgage Early
Contrary to popular belief, most modern mortgages allow for early repayment without penalties! Making extra payments towards your principal balance can significantly reduce total interest paid and shorten the loan term. Options like bi-weekly payments or refinancing to a shorter term can accelerate your journey to mortgage-free homeownership.
Now that we’ve done a little myth-busting for you, don’t let these common mortgage myths deter you from taking the first steps towards owning your dream home! We hope after reading this blog post, you are UNafraid to reach out to our highly skilled team of mortgage loan officers at Community Choice – where mortgages are simple, easy, and UNcomplicated.
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