Americans seem to make the mortgage process harder than it has to be. I would like to help ease any misconceptions that you might have and make the process easy for you. It is a process that most people only go through once or twice in their lifetime and as a result, even if they become experts the first time around, much of what they learn is forgotten or the products & experience changes between deals.”
If you are considering buying a home, then let me clarify a view myths that are currently out there:
Myth #1: You need 20% down to buy a home. I HAVE GOOD NEWS: there are programs that allow people to buy a home with as little as 3% down (0% for veterans & through certain housing authorities). By the way, the average down payment in the U.S. is 11%.
Myth #2: The credit score you see is the same one your lender will see. Buyers seem to misunderstand that lenders do not use credit scores from free monitoring companies. Mortgage lenders use scores from Experian, Equifax, TransUnion. They pull from all 3 credit bureaus and use the middle of the 3 scores.
Myth #3: A lower down payment means a higher interest rate. Rates are not worse for those with a low down payment. The borrower can even receive a gift from a friend or family member to help pay for the down payment. You can also look for fixed rate mortgages that will help you control the interest rate.
Myth #4: All lenders are created equal. There are so many DIFFERENT lenders out there. You will definitely want to make sure you get the best rate, service, and know the integrity and character of the lender you are working with. I am a broker and I work for you. NOT THE BANK. You will want to make sure that your lender is working to represent you and give you the best trusted advice for your real estate and mortgage needs.
Myth #5: A low credit score is a deal breaker. Not true. But the credit score does determine most of the rate. With that being said; there are loan programs that can assist you with a score of 500 or better. Lenders have different shopping models and can also offer you a credit repair service and help you manage your debt.
Myth #6: Find your home 1st then apply for your mortgage 2nd: You should NOT find the home first! In your home-buying process; you will greatly benefit from putting the mortgage process AHEAD of the real estate. The best advice I can give you is get pre-approved, set a budget and ask questions. Then start shopping for a home. This will allow you to set your ideal price, monthly payment and down payment.