Looking for a mortgage for your dream home? Make sure you have the facts and then walk down to the bank with confidence.
Misconceptions disallow us to make rational decisions, which end up hurting us immediately and down the road. And when it comes to something as important as your mortgage, being able to filter out fact from fiction could save you thousands of dollars. Getting a mortgage may not be the easiest thing in the world, which is why discerning myths from reality will only help you throughout the entire process. Here are a few mortgage misconceptions you may have which you should clear up right now.
Your Best Credit Score Is Used for Approval
You may think that lenders will use your highest credit score, but that couldn’t be further from the truth. Lenders take the middle of three credit scores. If you are applying jointly, they will take the lower of both the middle scores.
The Rate You’re Quoted Is Final
Rates are tied to the daily trading of mortgage bonds, so most rates change on a daily basis. There are instances where the refinancers can like a rate when it’s quoted, but you must give your lender enough information and documentation to determine if you qualify for the quotes rate.
Mortgage Insurance Is Required if Your Down Payment Is Less Than Twenty Percent
Mortgage insurance is usually required if your down payment is less than twenty percent. The most common way to do this is with a combination mortgage. The first mortgage caps at eighty percent and the second mortgage takes care of the remaining twenty percent–often called a piggyback.
Mortgages may seem like stressful contracts to obtain, but with the right preparation, they don’t have to be! Contact Dean Rathbun when it comes time to finding the perfect plan of action to buy your home. We are happy to help you.