Myths About Mortgages
Here are a few myths about mortgage loans I would like to debunk for you:
#1: I should shop for a lender based on the interest rate and fees they offer. Busted: Most rates and fees are comparable between lenders. What matters is working with a lender who sees you as a person and not a file so they are responsive. Someone who will advocate for you if we run into any issues so your loan will get closed on time. In our experience big banks and online lenders stop answering the phone when the going gets tough. Unfortunately, that can lose you a property and put your earnest money deposit at risk. #2: Only first-time home buyers can use FHA or other assistance programs. Busted: FHA is not a first-time buyer loan. The rule is you can only hold one FHA loan at a time. For many assistance programs you don't have to be a first-time buyer as long as you are purchasing a personal residence and don't own another property. #3: I need 20% for my down payment Busted: When you're buying a personal residence this is not true -- in fact it's not even common. Most buyers put down 3%-5% on their home. Even as an investor you may be able to avoid a larger down payment if you are willing to move into the new property or qualify for a second home purchase. Talking with a good lender as early as possible will give you the facts about your personal borrowing power and help you take the most effective steps toward qualifying for the right loan.