- MYTH: An interest rate is the only thing that impacts your monthly payment. Wrong. Most monthly mortgage payments consist of principal, interest, taxes and insurance.
- MYTH: A pre-qualification is the same as a pre-approval. Wrong again. A pre-qualification is when a potential borrower provides basic financial information to the lender to get an estimateof how much house the buyer can afford. Pre-approval actually involves an application and review by an underwriter, verifying the borrower’s credit score, income and assets. Always, pre-approve.
- MYTH: Choosing the mortgage banker wherever you do your checking and savings. Sure, it’s a good place to start, but why stop there? Research your all of options carefully by asking friends, family, tax advisors, realtors or trusted colleagues for referrals. Chances are you will be surprised at the outcome. Rates and fees can vary widely from one lender to another, as can closing costs. You can save thousands of dollars by shopping around.
- MYTH: Owning a home is more expensive than renting. Actually, owning a home is almost always sound investment over the long term. Value may rise and fall with the market, but as you pay down principal, your investment increases value. Plus, homeowners may benefit from tax deductions, that renters won’t qualify for. And, of course, there’s nothing like that sense of freedom and pride.
- MYTH: Times are too hard to refinance right now. Yes. The entire world is suffering the cost of the credit crisis, instigated by the mortgage foreclosure fiasco. However, for the majority of homeowners, and a growing number of previous-homeowners who went through the foreclosure or short sale process, there are many viable programs out there. In short, if you haven’t considered refinancing in the last six months or so, you are missing out on a lot of savings. And if you lost your home to foreclosure or short sale prior to 2012, there may be a new world of opportunity to explore.
- MYTH: The mortgage process is just too hard. Yes. Mortgages require due diligence and refinancing can be daunting. And there really are no one-size-fits-all answers. But, if you look at how much money you can save over the years, then the effort is worth it. Also, because there are mortgage refi loans available with no closing costs, there’s no reason not to exploring refinance options even to save a single percent. It all adds up!
To get up to speed on the modern mortgage market and make better decisions on loans, simply give us a call at (727) 773-0505
