There’s a lot of misinformation out there when it comes to getting a mortgage. Some of this information, although rooted in some form of fact, has grown and morphed into myths of epic proportions. These can cause some potential homebuyers to hesitate because they’re worried about the application process, concerned about being locked into something they don’t want or believe they don’t have good enough credit to qualify for a mortgage.
Myth: You need to put at least 20% down to qualify for a mortgage.
Fact: Not anymore.
This myth causes a lot of angst for first-time homebuyers. A 20% down payment is a lot of money, and many younger homebuyers just don’t have that type of cash lying around. However, we’ve got good news. There are a variety of loan products that require very little down-payment, For example, government loans like FHA, VA or USDA loans require very little or even no down payment if you meet the requirements. Even conventional loans can be taken out with a 15%, 10% or even 5% down payment (although you will have to pay a little bit of private mortgage insurance, or PMI).
Myth: You need to complete a detailed application for an accurate rate quote.
Fact: You don't!
Any reputable bank or lender can give you a very accurate rate and fee quote with some basic information. Anyone telling you differently is hoping you will stop shopping because it's simply such a hassle to fill out a complete application. I can give you an accurate quote in 10 minutes or less! Call me today at 913.748.4612 and let me help you find the best rate for your situation!
Myth: You have to stay with the lender that pre-qualified you.
Fact: You don't!
Don't get pressured or guilted into paying a higher rate or fees. If the quoted rate or fee is higher than ours, and you are feeling pressured to stay with a more expensive lender, they might not have your best interests at heart. Call me today and let me show you how a low rate + low fees = low hassle!
Myth: 30-year fixed rate is always best.
Fact: There are potentially better mortgage products for your situation.
The 30-year, fixed-rate mortgage is traditional, it’s true. And they’re a very popular and common option, but they may not be the best choice for you. For example, your monthly payments will be higher if you take out a 15-year fixed-rate loan, but the overall interest you’ll pay over those years will be significantly lower. Or, if you only plan on living in your home for 5-7 years or so, you might want to consider an adjustable-rate mortgage, or ARM, which could qualify you for a better interest rate.
Myth: I need a perfect credit score to get a loan.
Fact: Although credit score plays a large role, it’s not the only thing lenders take into account.
Yes, your credit score is significant when applying for a mortgage, but there’s a lot more lenders look at, including your debt-to-income ratio, your collateral and other factors. Having a higher credit score means you’re more likely to get approved and at a lower interest rate. But even if your credit is less-than-perfect, lenders usually will loan to individuals with scores as low as 620...and some go even lower. Again, it all depends on your situation!
Myth: Only your income determines how much you can borrow.
Fact: There’s more to it than that.
Once again, just like your credit score, your income is a factor when applying for a loan. But it’s not the only factor.
Myth: The mortgage process is difficult.
Fact: KS StateBank makes the process smooth and easy for borrowers.
Getting a mortgage doesn’t have to be difficult or stressful. A great lender will show you your options, walk you through the process and assist you every step of the way from application to closing. At KS StateBank, we pride ourselves on providing the very best service for our borrowers. Call us today and let us show you the KS StateBank way!