14 Jan My 6 Myths of Mortgage
Think you always need to have 20% down? There’s a lot of misinformation floating around about mortgages. I created six simple points to help dispel some of the myths I hear all the time.
1. Pre-Qualified vs Pre-Approval
In short, Pre-Qualified is the first step in the mortgage process. Obtaining a Pre-Approval involves completing a mortgage application, reviewing the full financials and the credit report.
2. You must have 20% down
There are many different types of down payment options with some government sponsored loan programs offering $0 down options.
3. You need perfect credit.
Having good credit is important, however, if your credit is less than perfect, compensating factors can be considered.
4. Owning a Home is more expensive then renting.
Owning a home can be a wise financial investment. In fact, a recent study completed in 2014 indicates that owning a home is 38% cheaper then renting.
5. All lenders are created equal.
Each lender, bank or investor has different guidelines and or requirements for their specific loan types. You should work with someone that you trust and ask them to review all available lending options.
6. 30 year fixed is always the right loan.
Based on your financial situation the 30 year fixed might give you the lowest monthly payment, however, if your long term goal is to pay off your loan as soon as possible it might not make the best financial sense.