Myth 1:
A 30-year mortgage with a fixed interest rate is the safest and best option.
There are different loan programs that may offer appropriate options for you. “Not everyone buys a home intending to live there for 30 years, so for many people, it makes sense to evaluate which loan option is best for you given your individual financial goals and the mortgage interest rate environment. However, that decision should be made after speaking with a trusted, knowledgeable mortgage professional," Michael says
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Myth 2:
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To qualify for a mortgage, you must be debt-free and have a 20 percent down payment.
Many lenders offer low-down payment options. Additionally, lenders look at several criteria to determine your ability to pay back a loan. Moreover, depending on your income, you may qualify for Down Payment Assistance Programs in your area. “Don’t sell yourself short,” Michael says. “If owning a home is your dream, talk to a loan officer – there may be a way to help make it happen.”
Myth 3:
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Mortgage qualification requires a high credit score.
Banks know life can get challenging sometimes, Michael says, and credit scores can suffer long-term consequences. A high credit rating certainly helps when applying for a mortgage, but great credit is not an absolute requirement. “In addition to low-down payment options, many lenders offer mortgage products that allow for more flexible credit parameters. That's why it's important to shop around and do your homework before self-selecting out of the process."
Myth 4:
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It’s cheaper to rent than to own.
Whether you’re renting or buying,
every month your money is going into someone’s pocket. When you own your home, the pocket you’re filling is in essence yours. That’s why the net worth of a homeowner is, on average, 40 times greater than a renter…the worth is in your home as an equity asset. “The longer you own your home, the more equity you build up, which is a great path to creating generational wealth” Michael says. “As a borrower builds equity, it can allow them the opportunity to start a business, consolidate high-interest debt or improve their overall financial standing."
Myth 5:
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You can’t qualify for a mortgage if you previously lost your home
Many people are under the impression that they can’t own another home if they lost their previous home due to financial hardship, including foreclosure, bankruptcy, or a short sale. But with re-established credit, it’s possible to take advantage of a wide variety of loan options. That's why speaking with a mortgage professional early on is critically important.
