3 Mortgage Myths: Busting The Most Popular Ones
Buying a home is never an easy choice. This process is only made more difficult by loads of information out there regarding home mortgages. Some of the information out there regarding home mortgages is true, and much isn’t. Here are some of the most popular home mortgage myths and why they aren’t real.
Mortgage Myth 1: “Wait for the Perfect Time to Buy”
There is no perfect time to buy a home. The trends will come and go, and there’s really no way to see when it might get better or worse. At some points in time, interest rates will be low. For example, in 2020, many interest rates for homes fell drastically. However, many people also lost their jobs during this time. Low-interest rates matter little if you don’t have a steady income to pay the mortgage with. On the other end of the spectrum, someone with a well-paying job might be looking to buy a home, but the market is relatively competitive. Just like with children, there isn’t a perfect time to buy a home. There’s a good chance that you’ll have to take out a mortgage and take on that debt regardless of the situation you may be in. The perfect time is when you feel confident with your finances and have enough to cover your mortgage safely from month to month.
Mortgage Myth 2: “30 Year Fixed Mortgages Save the Most Money”
This is a piece of advice that is commonly passed down from previous generations. The truth is that most people, when purchasing their first home, won’t spend more than ten years in their first home. Getting a thirty-year loan on a first home without considering what might happen during the next ten years would be a missed opportunity. A thirty-year loan comes with a higher monthly interest rate, which is money you could be pocketing every month if you’re planning on staying less than ten years anyway.
Mortgage Myth 3: “You Need a 20% Down Payment to Get a Good Deal”
This is great news for first time home buyers. In fact, according to a report done by Zillow, only 24 percent of home buyers actually put down 20% for a home. You can qualify for homes without having to have 20% of their price in cash. Freddie Mac and Fannie Mae help homeowners secure down payments as low as 3%. Some programs with the USDA and VA might not require any down payment at all. If you are looking to make the move on buying a home soon, make sure to check out all the available options. Homeowners can get a home with a down-payment much lower than they’re expecting!
The home buying process might be confusing, especially if you’ve never done it before. Hopefully, these tips have helped to alleviate some of those mortgage myths doubts and concerns. If you have any more doubts or concerns, don’t hesitate to contact us! We have helped countless customers and have answers to your questions regarding various types of loans.