After 36 years in the real estate business, there are several myths about mortgages that persist, even though they are not true. Here are some of the most common ones I have encountered:
Myth: You need perfect credit to get a mortgage. Fact: While having good credit certainly helps, it is not the only factor that lenders consider when determining your eligibility for a mortgage. You can still qualify for a mortgage with less-than-perfect credit, although you may have to pay a higher interest rate or make a larger down payment.
Myth: You need to put down at least 20% to buy a home. Fact: While a 20% down payment can help you avoid paying for private mortgage insurance (PMI), it is not always necessary. There are many mortgage programs available that allow for lower down payments, such as FHA loans, VA loans, and USDA loans.
Myth: You should always choose a 30-year fixed-rate mortgage. Fact: While a 30-year fixed-rate mortgage is a popular choice, it is not always the best option for everyone. Depending on your financial situation and future plans, you may want to consider a different type of mortgage, such as a 15-year fixed-rate mortgage or an adjustable-rate mortgage.
Myth: You should always choose the lender with the lowest interest rate. Fact: While interest rates are important, they are not the only factor to consider when choosing a lender. You should also consider the lender’s fees, customer service, and reputation.
Myth: Refinancing always saves you money. Fact: Refinancing can save you money, but it is not always the best choice. Before you refinance, you should consider the costs of refinancing, such as closing costs and fees, and make sure that you will save enough money in the long run to make it worthwhile.
It is important to do your own research and speak with a mortgage professional to understand the facts and make informed decisions about your mortgage. Let us know if you would like any recommendations. We work with plenty of really great professionals in the field.
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