With so many people giving opinions on the housing market, interest rates and how to finance that purchase; information can be missed or is just not true. So let’s just debunk some of those myths.
MYTH: You must have a 20% down payment to buy a house.
TRUTH: Different loans require different down payments—some as low as 0%!
MYTH: Pre-qualified means the same thing as pre-approved.
TRUTH: A pre-qualification is a quick assessment of how much money you can borrow based on info you provide—no documentation necessary. A pre-approval letter indicates you’ve provided financial information to a lender, and they have approved you for a designated loan amount. Serious about buying? Get pre-approved.
MYTH: You need a stellar credit score to get a mortgage.
TRUTH: For a conventional loan backed by Fannie Mae or Freddie Mac, the minimum score required is 620. The lowest credit score to buy a house with an FHA loan is 580. Mortgages are out there for folks with a wide range of credit scores. Plus, there are things you can do to improve it along the way.
MYTH: You don’t need to shop for mortgage rates. They’re the same no matter where you go.
TRUTH: Just like any major purchase, shop around! Not all mortgage rates are the same. Closing costs and other fees can vary from one lender to another.
MYTH: It’s cheaper to rent a home than it is to own a home.
TRUTH: Owning builds equity, offers tax benefits, and gives you a predictable payment year after year. Not to mention, buying now allows you to lock in historically low rates.
Don’t be fooled by every mortgage myth you hear! Talk to folks who know the truth and can help make homeownership a reality for you.
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