- “It’s impossible to get low down payment loans.” – MYTH!
FHA down payments are 3.5% and VA is 0%. In some areas, there may be some 0% down payment USDA loans available. FNMA and Freddie Mac have 3% down payment programs.
- “It takes perfect credit to get a loan.” – MYTH!
There is a relationship of better rates to better credit but many issues on a credit report can be explained or corrected. The way to know for sure is to speak to a reliable lender.
- “If I’ve had a bankruptcy or foreclosure, I can’t qualify.” – MYTH!
Credit history following a bankruptcy or foreclosure is very important and there can be extenuating circumstances. It only takes a few minutes with a reliable lending professional to find out if your individual situation will allow you to qualify for a new mortgage.
- “Getting pre-approved is expensive.” – MTYH!
Usually, the only expense to getting pre-approved is the cost of the credit report which could be around $35. The advantage is not only that you will know you qualify for a particular mortgage amount, an agent serving you needs to know it, and the seller of the property you want to buy will want to see written evidence of it from a reputable mortgage lender.
- “I should wait to qualify until I find a home.” – MYTH!
It can take weeks to qualify for a mortgage especially if there are issues that need to be corrected. The best interest rates are only available for the highest credit scores. It is to your advantage to start the qualifying process early in your home search. Pre-approval is really the first step of the process and usually expedites the loan processing time once your loan application is formalized. Should you identify the home you want to buy quicker than anticipated, lacking a written pre-approval statement to supply with your offer can seriously compromise your negotiating position. The worst consequence of not finding a home to buy before your financing pre-approval expires, usually after 90 days, is that you may have to re-submit some documentation and/or pay a nominal fee to get your credit report updated.
- “All lenders are the same.” – MYTH!
Reliable lending professionals will explain the entire process before collecting fees, quote fees up-front, have competitive products, do what is necessary (within regulatory and ethical bounds) to get the loan approved and close at the locked rate and terms. Ask for recommendations from recent borrowers or a trusted Realtor.
- “Adjustable Rate Mortgages are more expensive than fixed rate mortgages.” – MYTH!
Adjustable Rate Mortgages can be less expensive than fixed rate mortgages if the buyer’s circumstances warrant it. If a buyer is only going to be in a home for a few years before selling, it can be determined if an ARM loan will result in the lowest way to finance the property. There are many variables and you need to be aware of them before deciding which type of loan to finance your home purchase. This, far more than extensive comparison shopping online for a rock-bottom interest rate quote, is a worthwhile expenditure of your time and effort. Most reputable mortgage originators with local presence in the community are glad to serve in this way and welcome a request to meet in person.
Buyers and Sellers need solid information to make good decisions. Call me with your questions or to get a recommendation of a reliable lender who can give you the real facts.