Getting to the Bottom of 6 Common Mortgage Myths

What six mortgage myths should all homebuyers be aware of? Today we will be covering these common misconceptions.
Today we are going to go over some of the worst pieces of mortgage advice that homebuyers actually believe.

1. Do not bother getting pre-approved. People hear this all the time, but it is absolutely false. Even if you know that your credit is good and that you are financially capable of a home purchase, buyers in today’s market cannot afford to submit an offer without a pre-approval letter. Additionally, getting pre-approved ahead of time will save you from falling in love with a home you can’t afford.

2. You must get a mortgage from the bank you already use. It is a common assumption that if you have an account with a bank, you have to work with that same bank when getting a mortgage. Actually, this is not a good idea in most cases. A better idea is to work with a mortgage professional. These experts have one job: to get you to the closing table.

3. You shouldn’t bother reading the fine print. There is a lot of terminology used in mortgage contracts that might be unfamiliar to most buyers. But this does not mean you should not pay attention to what you sign. If you are not confident reading through all of these documents alone, working with a qualified professional to dissect each page can help you better understand what exactly you’re agreeing to.

A mortgage professional should instead advise buyers to borrow based on what is feasible, not what is possible.

4. You should always go with the lowest interest rate. It may sound strange, but sometimes a higher rate is better. It is more important to look at all aspects of the loan and choose a program that works best for you as a whole, rather than focusing too intently on the interest rate alone.

5. First-time homebuyers are guaranteed free money. Mortgage professionals do love helping first-time buyers, but not all new homebuyers can or will qualify for certain programs. Also, not all first-time homebuyer programs are all that great to begin with. Sometimes a lower monthly payment means more expenses at the closing table, so it is important to consider all aspects of a deal before making a decision.

6. You should borrow as much as you are approved for. The issue with this way of thinking is that what a person qualifies for is not the same as what they can afford. A mortgage professional should instead advise buyers to borrow based on what is feasible, not what is possible.

If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.