One misconception in a compelling financial decision can keep you from making progress in your investments. The same goes for mortgage loans; over the years, a number of myths have been cultivated in the housing marketing.
To make sure that you are not held back from getting the home of your dreams, we have compiled ten myths that you may have been informed of:
Myth #1: Homeownership in not good choice in this housing market
In reality, there is no perfect time to buy a house. The housing market is wavering, as is the entire economy. And yet, people take strong financial decisions every day.
The key to purchasing a home without getting wrapped up in financial burdens is to stay within your financial capacity, and look for beneficial loan terms.
Myth #2: Homes are too over-priced
In truth, home prices and mortgage interest rates have remained steady over the past few years. Due to flexible rates on several home loans, numerous middle-class homebuyers have been able to secure homeownership.
Myth #3: Mortgage loan rates are too high
Mortgage loans are higher than they used to be, and will be higher in the future; this is not specifically related to this time period. If you opt for a flexible loan rate, you can receive the many benefits which will unburden you of traditional mortgage costs.
Myth #4: I need to fulfill 20% of home value as down payments
The loan market has evolved to bring much more flexible loan terms, ones with substantially low down payments. Down payments for VA loan can be as low as 3%, and FHA loans can offer 3.5% down payments.
If you have an excellent credit score, you may even be able to lower the interest rates that result from low down payments.
Myth #5: There are no new residential properties to consider
If your area does not have any active constructions, or newly constructed homes, talk to a real-estate agent to discover potential residential areas which do have new properties.
Myth #6: I have a poor credit score—I will not receive a loan
While is it crucial that you monitor your credit report, and avoid debts, bad credit does not necessarily mean lack of, or poorly-rated, home loans.
There are no hard and fast rules in mortgage loans; you have a chance to re-establish your credit, and receive a reasonable loan rate for the time being.
Myth #7: I have no credit score, thus I do not have bad credit
Some is better than none, and a credit score is no exception to the adage. Mortgage brokers need your credit score to establish an opinion of your financial habits and reliability. No credit score can hurt your loan process; you will need to build credit before you get a home loan rate.
Myth #8: Unsettled debts will hinder in getting a loan
Unless the debt is too high to become a concern for your mortgage broker, it will not get in the way of your loan. A few odd arrears, such as medical bills, will not affect the loan underwriting process.
Myth #9: Pay off the current mortgage early to acquire a new loan with ease
Mortgage loans terms stay intact till they expire; completing the payouts for a home loan before the term is up will not improve your chances of securing a second mortgage (though it will not hurt those chances either).
Myth #10: Normal financial habits are okay during mortgage loan analysis
Before applying for a mortgage loan, till you close the process, you need to be diligent in maintaining spending habits. Drastic financial shifts can result in major holdups during closing time, as well as affect your original loan terms.
To learn more about the home loan process, don’t hesitate to reach out to e-Finance Mortgage, LLC!
Call today at (844) 433-4626 to get assistance with your getting a convenient loan rate. Our services are available to homebuyers and home owners in California, Colorado, Iowa, Illinois, Michigan, and Washington.