5 Mortgage Myths Debunked
Myth #1: Find a home first, then worry about financing.
This is a very painful lesson for many first-time buyers who fall in love with a home only to learn they can’t qualify. That’s why it’s important to consult with a lender before you embark on your home-buying journey.
Myth #2: You’ll need perfect credit.
Few people have perfect credit — and that’s not what lenders are looking for anyway. If you have a steady income and pay your bills on time, it may be possible to qualify for a mortgage. The minimum credit score you’ll need depends on the loan type.
Myth #3: You’ll need to put 20% down.
only one-quarter of buyers (24 percent) pay 20 percent of their home’s purchase price upfront as a down payment. Qualified borrowers can secure home financing today through many different programs with much lower down payments.
Myth #4: You can’t use gifts/grants for your down payment.
Many mortgages today allow the down payment to come from any source as long as those sources are documented. According to the 2017 Zillow Group Consumer Housing Trends Report, 20% of buyers used a gift or loan from family or friends.
Myth #5: It’s always best to get a 30-year fixed-rate mortgage.
Wrong again. The 30-year fixed mortgage is certainly a popular option, but there are many mortgage options out there. Because each situation is unique, you should talk with several lenders to determine the best loan options for you, taking into account your financial readiness, how long you plan to own the home, and other factors.