5 Mortgage Myths You Should Forget About

To make your mortgage loan application process easy, getting help from experts is important. In Utah, you can forget about the hassle of shopping for a mortgage loan. Choose the loan service that can provide you with easy steps — from finding the best rate to accomplishing an underwriting agreement.

1. Getting Pre-qualified is Not a Guarantee of Getting Pre-approved

At first glimpse, these two terms mean the same, but they are not. In most cases, you can be qualified for financing if the lender receives considerable answers from you based on the set of questions that they presented. On the other hand, there is another step that you must accomplish — the pre-approval process.

What is Pre-approval Process?

The pre-approval process is more detailed compared with determining if you are pre-qualified for the loan. Lenders have systematic ways to evaluate your ability if you can pay back the loan, especially if you are eyeing for a mortgage. Mortgage lenders want a guarantee that you can actually buy the home.

2. Shopping Around for Lenders will Impact Your Credit Score

A portion of a percentage can make a difference. That being said, you should get the best interest rate available. When you apply for a home loan, here’s what typically happens. The mortgage lender may make multiple credit checks. You might get anxious, thinking that it may impact your credit score. You should not worry because the damage brought by lenders making inquiries is just too small.

3. You Might Need Good Credit to Own a House

owning a house

To obtain the lowest mortgage rate, your credit score must be satisfactory. You might find it difficult to buy a home if your credit score is lower. But, who says you can’t purchase a home if you have a credit score below 620? You can through the assistance of the Federal Housing Administration. Loans backed by this entity will only require you a score of 580 for pre-approval.

Here’s another tip for you. Find a co-signer who can support you to make a bigger down payment. Most people wanting to own a house do this to reassure their lenders.

4. You Can’t Be in Debt When Buying a House

Raising a family is a serious undertaking to manage. You need to pay household bills, education of your children, food and water, daily commodities, etc. In some circumstances, you have no other way but to get a new credit line to suffice your needs in life.

Most mortgage lenders will require homebuyers that their debt-to-income ratio should be 36% or less. If it’s beyond that, it might give you a trying time to close a deal with the lender. Here’s what you can do. Be brave to talk to your lender. Prove to them that you have solutions to make ends meet. Finding more ways to earn more income is one way.

5. You Need to Prepare 20% Down Payment for a New Home

The 20% down payment was a thing of the past. But if you can afford it, it will help you get a better interest rate. Now, this rate has decreased dramatically, thanks to FHA loans. You can now have a home you can call your own if you have at least 3.5% down payment. Don’t you know that the Veteran’s Administration may not require a down payment at all?

You will have complete confidence in finding the right home for your family. Work with the professionals to get the best deal available on the market. They will enthusiastically assist you in getting what you deserve in life.

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