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Common Mortgage Myths —Debunked!
We’ve talked a lot recently about getting a mortgage for the first time. But whether it’s your first time, your fifth, or somewhere in between, you might feel like the mortgage process is a little confusing. That’s understandable, but it doesn’t have to be that way. Some common mortgage myths that are floating around out there just won’t leave. So, we’re here to go all mythbusters on these mortgage myths!
Mortgage Myth #1. You Need 20% Down to Buy a Home
There was a time when 20% down was the gold standard for purchasing a home. The good news is that those days are long gone.
Most loans require less than 6% down, and FHA loans require just 3.5% down, while you can get a VA loan with no money down at all (if you qualify, of course).
There are also down payment assistance grants and programs that can help you come up with the cash you need, especially if you’re buying your first home.
If you want to buy a home but don’t know if you have enough money saved up, reach out! We’re here to help you figure out how to make it happen, and it just might be more possible than you think. Doesn’t “homeowner” sound like a nice goal for 2021?
Mortgage Myth #2. Shopping for A Loan Hurts Your Credit Score
You may have heard that having a lender pull your credit hurts your credit score, so you might be hesitant to have multiple lenders doing just that. While it’s true that multiple inquiries can ding your score, there’s more to it.
The FICO scoring model allows for similar credit inquiries in a 30-day period to count just once. So, pick 30 days and start shopping! Getting the best interest rate is important, and it’s worth taking the time to look at different lenders.
As a broker, we have access to many different lenders, loans, and interest rates, so we can help you with that, too. Going to New Way truly is one-stop shopping for your mortgage. Easy peasy.
Mortgage Myth #3. All Mortgage Lenders (and Brokers!) are the Same
As a broker who connects you to many different loans and lenders, we know how silly these common mortgage myths are! There are many things that differentiate brokers and lenders. Each offers different products, interest rates, fees, and guidelines.
And at New Way, we’re even more different than the rest of the pack. We’ve removed the commissioned loan officer from the equation and replaced them with experienced mortgage experts who are passionate about the process, NOT the next sale.
By cutting out the beef, we’re able to operate at a much lower cost while still providing fresh technology and a robust support team to make things fast, easy, and affordable. And the best part is that our customers have a better experience and don’t have to pay for the loan officer’s commission, which ensures lower rates and reduced loan fees all while getting access to many different loan programs.
If you’re ready to experience the new way of getting a mortgage, well, you’ve come to the right place.
Mortgage Myth #4. You’ll Never Get a Mortgage After a Bankruptcy or Foreclosure
Now, it’s just not true that you can’t get a mortgage after a bankruptcy or a foreclosure, though you do have to wait a period of time before you can get a mortgage again. In the case of bankruptcies, the waiting period varies depending on whether the bankruptcy was a Chapter 7 or Chapter 11 filing.
If you have a bankruptcy, foreclosure, or lien in your past, talk to us as soon as possible about the next steps to take so you can secure mortgage financing in the future. The sooner in the process you talk to us, the more we can help make sure you’re ready to go when it’s time to buy.
Mortgage Myth #5. Principal and Interest are All That Matter
A monthly mortgage payment is composed of many things, and principal and interest are just two of them.
When you’re calculating a monthly payment, you also have to consider items that are tacked on to principal and interest. These may include property taxes, homeowners insurance, and mortgage insurance (often charged if you put less than 20% down on your home or get an FHA loan). Often, these payments are divided up into monthly increments, and you pay a portion of them each month into your escrow account. Then, your escrow account pays those bills on your behalf.
Mortgage Myth #6. It’s Best to Get a Standard 30-Year Mortgage
While many people do get a standard 30-year mortgage, it may not always be the best choice for you. Depending on your unique financial situation, a different type of loan may suit your needs better.
As a mortgage broker, we have access to all different types of loans. If you want something out of the norm, we’re happy to help you find it. We’re also happy to give you the information you need to decide what’s best for your unique situation.
Mortgage Myth #7. The Mortgage Process is Difficult and Stressful
While we’re the first to say that getting a mortgage can be difficult and stressful, we’re also the first to argue that it certainly doesn’t have to be!
Here at New Way, we use the latest technology to make sure that getting your mortgage is seamless and easy. Our team over-communicates so you never have to wonder what’s going on with your loan. We do everything we can to find problems before they ever become, well, problems.
We hope this helps clear up some common mortgage myths that have been floating around. If you’re curious about the New Way difference, go here to get started or give us a call at (916) 465-6639. Let’s do this!