Looking for a home? Make sure that you know the facts when it comes to acquiring a mortgage.
Getting a mortgage can be a complicated process. Because many people have found this procedure to be an absolutely hair-tearing step in the home-buying process, a plethora of myths have spawned against the mortgage application. But when you know the process, it is actually not that bad. Separate fact from fiction with these mortgage misconceptions set straight.
Myth 1: Lenders Look at Your Best Credit Score
When lenders look at your mortgage application, they DO NOT take your best credit score into consideration. Rather, they take the middle score of the three credit scores they check. They also take the lower of the middle scores if you are applying with a partner or spouse.
Myth 2: The Rate You’re Quoted is Locked
Rates are tied to the daily shifts of mortgage bonds and the economy, so a lender’s rates may change, even through the day. So unless you’re locking a rate right in the moment, your rate will likely change. You can often lock a rate when it’s quoted if you have given the lender enough information and proper documentation.
Myth 3: Fixed Rate Mortgage is Always Better Than Adjustable Rate Mortgage
Many people opt to go with a fixed rate mortgage because it can lock insurance rates no matter what happens to the economy. But these fixed rate mortgages are typically for those who will stay in their homes for a long time, and lenders often prefer borrowers take a 30-year mortgage. An adjustable rate mortgage keeps the interest low, but it’s only for a limited time. It is then subject to the forces of the market.
Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you!