There are several home-buying myths that have often dissuaded potential home buyers from looking for homes. Being aware of these myths will make you more confident in your ability to purchase a home.
1. You can get a loan with less than 20% down. FHA, VA, USDA and other government-sponsored programs will originate loans with as little as zero down. You can also receive gifted funds from relatives or friends to increase the amount of your down payment to help you qualify.
2. Having a low credit score doesn’t necessarily disqualify you from getting a loan. Increasing your down payment to 10% with a credit score as low as 500 may allow you to get an FHA loan. The larger the down payment, the less risky your loan will be for lenders. A cosigner will also reduce how risky the lender perceives you if your credit score is low. Be sure to check your credit report for any correctable errors that may be influencing your score.
3. You don’t get your loan just because you have been preapproved. Once you get an accepted offer, followed by an appraisal and more documents to your lender, you still won’t have the loan. The loan is yours when underwriting gives the final approval, you sign the loan documents and the sale closes.
4. It’s not all about the interest rate. Compare different rates with the loan terms and up-front fees. Big up-front fees may cost you more than the difference in interest between loans. The annual percentage rate (APR) will be the determining factor in what loan may be best.
You can be assured that your best interests will be first and foremost when it’s time to begin the loan process. Call or email us, and we will put together a loan program with the interest rate and terms that work best for you.