When you told people you were thinking about buying a home, you probably got a lot of advice. People always have an opinion, so it's likely that everyone did. You probably got the worst advice you could have gotten from well-meaning people, but you had no way of knowing that.
Let's get rid of a few of the most common myths about buying a home and choosing a loan. First of all, the idea that a 30-year fixed-rate mortgage is the only type of mortgage to ever think about. When your parents or grandparents first thought about buying a home, this may have been the case. The fact is that buyers with different financial situations and needs can choose from a variety of loan packages. A fixed-rate mortgage will be the best choice for many people. For some people, a mortgage with an adjustable rate will make the most sense based on their finances. Your loan officer will be able to explain how they are different and help you decide which one is best for you and your situation.
Another common misconception is that you need to know what home you want to buy before you talk to a mortgage professional. But this is probably the worst time to talk to a mortgage expert. It's best to wait to look for a home until you've talked to a mortgage professional. They can help you narrow your search so you don't fall in love with a home that's way out of your price range. A mortgage expert can save you a lot of time and heartache when you are trying to decide between a house you can afford and one that a realtor showed you but you can't afford.
Your own bank is the only place you should apply for a mortgage. At least, that is what you will be told. Again, that may have been true forty years ago, but that doesn't mean it's still true today. The mortgage market is very competitive, and there are a lot of lenders who focus on this industry but are not retail banks. You might not want to rule out working with one of these lenders because they often have the best loan deals.
Online mortgage lenders are risky. That's what the old-fashioned people will say. You should be careful when choosing an online lender, but there are a lot of safe and reputable ones. You'll want to make sure that their website is encrypted and safe so that you can enter your information with confidence. Most of the time, these lenders are actually a group of lenders who work together to give you the most loan options. Before you put in your personal information, you should make sure the site is encrypted and safe. Most sites will have information about how they protect your information right on the site.
You've probably heard over and over again that you can't get a mortgage if your credit isn't great. People with bad credit or no credit history at all can get mortgages from a huge industry that has grown up around them. Instead of having your friends and family turn down a loan you haven't even applied for yet, talk to a mortgage professional. They can open the door to a whole world of lenders who are waiting to help people with little, no, or bad credit.
If you don't have enough money for a down payment, your mortgage payments will be very high and you'll have to pay private mortgage insurance (PMI). Again, this is not true at all. There are a lot of mortgage packages for people with little or no down payment. Many of these packages combine loans so that you don't have to pay private mortgage insurance (PMI) (private mortgage insurance).
The home loan business is a big one that grows every year. Talking to mortgage professionals instead of well-meaning but uninformed family and friends is the best way to get ahead in the business. Even though your family and friends may give you good advice, they often just tell you old, false stories. In this article, we have only talked about a few of these myths. There are many more. The best thing to do is to get the information from a mortgage professional, not from your friends or family, who might have given you wrong information when they heard you were thinking about buying a home.
