First-time homebuyers
are often intimidated with home loans. While it is true that it is a
complicated and lengthy legal process - it is not impossible to get approved
for a home loan as long as you have the minimum requirements set by lenders.
Some of the things
that stop potential homebuyers from applying for a mortgage are myths that
circulate around us. To set some records straight, we are here to debunk some
of the most common mortgage myths. Better get your notes ready get ready to be
informed.
Getting Pre-approved Is The Same As Getting Pre-qualified.
A pre-qualification
and pre-approval may tell you how much the maximum loan your lender can offer
you, but these two are not the same thing. In pre-qualification, lenders will
only review the data you gave them, and you can get the results after a few
minutes. As for pre-approval, they will verify the documents you will be
providing to make sure you're qualified for the loan.
A Perfect Credit Is Needed To Qualify For A Home Loan.
You don't need to have
a stellar credit to get approved for Mortgage
Loans Midland. While some mortgage programs will require you to have
a good credit score, some lenders accept borrowers with a score of 580 or lower.
You also have the option to pay a bigger down payment or get yourself a
cosigner if you don't qualify for a mortgage.
You Need To Be Debt-Free To Get Approved For Mortgage.
Mortgage lenders have
a specific DTI ratio requirement for their borrowers. You don't necessarily
need to have zero debts under your name to qualify. It just needs to be within
their DTI ratio requirement for you to qualify.
You Can't Buy A House If You Have Student Loans.
While a considerable
number of the population in the US have student loans, it shouldn't hinder your
ability to qualify for a mortgage. Thanks to government-sponsored agencies, you
can now fulfill your dream of owning your own house with affordable mortgage
programs made available nowadays.
You Need To Save At Least 20% Down Payment.
Before, 20% down payment is the gold
standard when making a home purchase. Nowadays, you can buy a house even if you
can only afford less than 20% down payment. There are also mortgage programs
that don't require any down payment at all. However, if you can, prepare 20%
down to avoid Private Mortgage Insurance fees.
Filing For A Bankruptcy Can Ruin May Chance Of Buying A House.
When you file
bankruptcy, this allows you to have a fresh start and eliminate some of your
debts. However, there is a waiting period before you can apply for a mortgage
after filing for bankruptcy. While this means you need to wait at least one to
four years before you can buy a house, you can still qualify as long as you
improve your score and build a healthy credit history.
Don't be fooled by
outdated and incorrect mortgage information. Do your research, ask your lender
and seek professional advice before believing any mortgage myths. Also, don't
forget the list above to keep yourself informed and educated with some of the
most common myths surrounding mortgages.
