Friday October 18, 2019
What if you lost your dream home because of a lie?
When it comes to getting a mortgage, there is a lot of myth and misinformation out there. And if you don't know the truth, it may be impossible for you to get the home you've always wanted.
Want to know the truth behind the most common mortgage myths? Keep reading to discover the answer!
Myth #1: Perfect Credit or Bust
When it comes to myths about mortgage, the number one myth is about credit. Specifically, buyers think they must have nearly perfect credit to get home financing.
This myth is untrue for several reasons. First, a truly perfect credit score would be an 850, and the vast majority of homebuyers don't have credit nearly that high.
Second, the exact credit requirements can vary depending on the type of loan you get. Many loans require a credit score of at least 620, but some loans (such as the FHA loan) can be approved with a score as low as 500.
It's true that if your credit is on the low end of this range that you might have trouble getting approval. But your score need not be "perfect," and you can work on improving your credit score each month by monitoring your credit.
Myth #2: The Big Downpayment
There is another mortgage myth just as persistent as the perfect credit myth. Many buyers think they are unable to buy a home if they do not put down at least 20% of its cost.
The truth is that less than a quarter of homebuyers put down 20% upfront. The vast majority use other loan programs that allow them to put less money down.
With an FHA loan, buyers only have to put down 3.5%. And with certain loans like the USDA loan, qualified buyers can buy a home with no downpayment at all.
In addition to the lower downpayment requirements, you're allowed to get some help. Parents or friends can make a gift to go towards the downpayment amount.
Myth #3: 30-Year or Bust
The last myth is tied up with a really big choice you must make. When it comes to buying a home, you will have the option of a 15-year mortgage or a 30-year mortgage.
Our final myth is that the 30-year mortgage is always the best choice. Depending on your situation, a 15-year loan may be better!
With a 15-year mortgage, the monthly payment will obviously be higher. However, the interest rate is much lower compared to the 30-year loan.
If you and your partner both work full-time, the 15-year option may look very attractive. You can pay your home off that much more quickly and not worry about paying a small mountain of interest.
Happily Ever After
Now you know how to bust these common mortgage myths. But do you know who can help put you in your dream home?
At Boone Homes, we specialize in matching the perfect house to each and every buyer.
To see what we can do for you and your family, contact us today!