Do you believe you know everything there is to know about mortgages? WRONG. You’ve probably been misled by some popular mortgage fallacies. We’ll refute such falsehoods and put the record straight in this blog article. So, what are you holding out for? Continue reading to discover the truth about mortgages!
Myth #1: A 20% down payment is required to purchase a home.
For most individuals, purchasing a home is the most significant purchase they will ever make. And, as with any large purchase, it’s critical to conduct your homework before signing on the dotted line. One of the most crucial things to understand is that a down payment of at least 20% of the purchase price is required to qualify for a mortgage.
While this may appear to be a large sum of money, keep in mind that a mortgage is a long-term investment. Making a bigger down payment can allow you to lower your monthly payments and pay off your home faster. Finally, paying down 20% upfront will save you money in the long term.
Myth # 2: You have to be debt-free to get a mortgage
Obtaining a mortgage is a significant financial commitment that should not be taken lightly. From choosing the ideal house to getting the best mortgage rate, there is a lot that goes into the process. One of the most crucial things to remember is that you must be debt-free to obtain a mortgage. Lenders will require confirmation that you can afford the monthly mortgage payments, and having debt will make it even more difficult to get accepted. So, if you’re considering purchasing a property in Albuquerque, be sure you’re in good financial health before beginning the mortgage process. Otherwise, you risk being turned down for a loan or being left with a mortgage you can’t afford.
Myth #3: You can’t get a mortgage if you’ve been bankrupt.
Getting a mortgage is a significant financial commitment that should not be taken lightly. Many go into the process, from choosing the ideal house to getting the best mortgage rate. One of the most crucial things to know is that you must be debt-free to qualify for a mortgage. Lenders will want to see proof that you can afford the monthly mortgage payments, and having debt will only make it more complicated to get accepted.
So, if you want to buy a home in Albuquerque, your finances should be in good shape before you start the mortgage process. If you don’t, you could be turned down for a loan or, even worse, stuck with a mortgage you can’t pay.
Myth #4: You have to pay PMI for the life of your mortgage.
PMI, or private mortgage insurance, is a type of insurance that lenders require from borrowers who put down less than 20% for their home purchase.
PMI protects the lender in case the borrower defaults on the loan. While private mortgage insurance (PMI) requires most loans with less than 20% down, it is not necessary throughout the life of your mortgage. In fact, once you reach 20% equity in your home, you can contact your lender and request that they remove the PMI from your mortgage.
Myth #5: Mortgage rates are always negotiable.
When looking for a mortgage, keep in mind that not all lenders are created equal. Some mortgage lenders are more accommodating than others during rate negotiations. However, it is significant to understand that mortgage rates are not always flexible. Most lenders charge all borrowers the same interest rate. Therefore, negotiating a lower interest rate, you must shop about and evaluate offers from several lenders.
Myth #6: A 30-year mortgage is always better than a 15-year mortgage
When deciding which sort of mortgage is suitable for you, it is essential to evaluate your financial objectives. If your goal is to pay off your mortgage as fast as possible, a 15-year mortgage may be the best choice. Reducing monthly payments to a 30-year mortgage may be a better option. The mortgage you pick should ultimately depend on your financial circumstances and objectives.
Myth #7: You need perfect credit to qualify for a mortgage.
One of the most common myths about mortgages is that you need perfect credit to qualify. While it’s true that having good credit will give you a better chance of qualifying for a loan, you can still get a mortgage with less than perfect credit. There are many programs available for borrowers with bad credit. So, if your credit isn’t perfect, don’t despair – you may still be able to qualify for a mortgage.
Myth #8: You can’t get a mortgage if you have bad credit.
If you have bad credit, you may think that qualifying for a mortgage is out of the question. However, that’s not necessarily true. There are many programs available for borrowers with bad credit. So, if your credit isn’t perfect, don’t despair – you may still be able to qualify for a mortgage.
There are many common myths about mortgages that can make the process of getting a loan seem more complicated than it is. However, by understanding the truth behind these myths, you can be better prepared to navigate the mortgage process and get the best loan for your needs.
