Are mortgage myths keeping
you from owning a home? Do you think your income, credit history
or savings account balance will prohibit you from qualifying?
Every day, thousands of potential homebuyers decide not to
purchase a home, based on myths about what is involved in the
approval process. Here are the four most common myths and why
none of them should stand between you and your dream of homeownership.
| Interest rates keep changing. This may not be
a good time to buy. |
Changing interest rates are just
part of life. Whether they rise or fall, it will always
affect potential buyers and sellers, but it shouldn’t
stop you from considering. If you’re interested
in buying a home, there’s no reason why you should
play the waiting game. With so many loan programs available,
focusing on the interest rate shouldn’t be your
top priority. There are many options out there, so before
you count yourself out, speak with a mortgage consultant
to determine whether now is the right time.
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| Owning costs more than renting.
I’m sure I can’t afford it. |
In many cases, the monthly cost
of owning a home may be equal to what you’re currently
paying in rent. Owning and renting both have their own
shares of pros and cons, so weigh each item carefully
when making your decision. Sure, monthly mortgage payments
also include homeowners insurance and taxes, but there
are also many advantages and benefits! After speaking
with a mortgage consultant, create a sample budget and
list the possible associated costs with each option.
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| I don’t have enough
money for a down payment. |
Many people would be surprised to
know that the down payment they will need is a lot less
than they think. With many new, low down-payment loan
programs designed specifically to make it easy for
homebuyers, it’s easier than ever. There are also
many creative ways to assemble the funds for a down payment.
For example, a motivated seller may be willing to pay
your closing costs or other items which would allow you
to increase your down payment. You might want to consider
borrowing against the equity in an insurance policy,
take on a co-borrower, or use a gift from relatives.
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| My credit is less than perfect, so I’ll
never be able to qualify. |
When it comes to applying for a
mortgage, worries about credit history can usually be
overcome. It’s important that you get a copy of
your credit report before you begin the mortgage process.
After you receive and review your report, try and report
any errors or changes to the credit bureaus so that they
can be corrected. Another option is to contact a CHI Financial consultant and ask about a free credit
analysis. Generally, mortgage lenders use a benchmark
of 38% of your income be directed to debt payments, including
your mortgage payment. Don’t buy anything large
on credit or apply for additional credit during the time
you’re seeking approval for a mortgage. Even homebuyers
with bankruptcies can obtain mortgages, depending on
the circumstances and length of time since the filing.
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