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Don’t Fall for These 4 Mortgage Myths when Buying a House

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During your lifetime, a house is most probably one of the most expensive ones you will buy. Because of this, you have to know everything and educate yourself on home buying before you go shopping around for houses. It includes the myths on Mortgage Loans Midland, TX.

You have to be confident when buying, so we are here to help clear up and debunk some of the most common misconceptions on mortgages.

Shall we get started?

Getting Pre-approved is the same as Getting Pre-qualified

These two are very much different. Knowing what these two means is the difference between losing a house to someone else and getting your dream house.

So what is a pre-qualification? It is the estimate of how much loan you can be approved for after your financial status is checked. If you have no proofs, you won’t be guaranteed to be approved for the very same amount.

A pre-approval in the other hand means that you have given enough proof and was given a letter from the lender which shows that you have been approved for a certain amount of loan. It shows exactly the number of how much you can afford instead of just a simple estimate.

You need to have at least 20% of the house price as a down payment to get a mortgage Nope. It’s not true. When you are a first-time homebuyer, don’t fall for this. You don’t need to have 20% in your bank account. There are a lot of options out there that offers low down payments. It is not required when getting a mortgage loan but it can help decrease your monthly fee.

Renting is much Cheaper than Having a Home

Well, a mortgage may seem a bit expensive to most people, but when you compare rent payments to mortgage payments, you can see that a monthly rent payment is cheaper. However, you have to know a few things before concluding that renting is better.

You Should have a High and Excellent Credit Score

Well, a good credit score can surely help you, but it’s not a problem that you have to fix. In the US, the average FICO score is 695. The minimum credit score to be qualified for a conventional mortgage is 620 however many other options allow at least a 580 credit score.

Otherwise, if you want a mortgage, you can try to improve your credit score. But it is not required. You have to be in the right range of credit score to be approved.

The Mortgage Process is Difficult

Lastly, this is just a myth. If you find the right lender, mortgages are as easy as they can be. Find the lender who can communicate well and who has your best interest at heart. As such, take the time to look for your lender. Don’t rush it.

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