Getting a mortgage can either be extremely easy or extremely hard depending on how much you know about the process. Let’s take a look at some of the biggest mortgage misconceptions.
Only the Best Credit Scores are Used
One of the most common misconceptions is about the use of credit scores in a two person mortgage. When applying for a mortgage with your partner, it seems logical that a lender would only use the highest credit score when making the decision. But this is simply not true. Both you and your partner’s credit score from the three major agencies are considered. They will take the middle score of each set and use the lower of the two to determine your approval and interest rate.
My Bank will Offer the Best Loan Rate
Many people think that their bank will give them the best rate if they have an account in good standing there. While it makes sense, it isn’t necessarily true. Just because you have a checking or savings account with a bank doesn’t mean they will give you a special interest rate. Lenders take many things into account including your credit score and savings but you do not get a special rate solely based on where you bank. It is important to shop around for the lowest loan rate available, don’t just stick with your bank.
If I Have a Low Credit Score, I Won’t Get Approved
While credit scores do affect most home loans, it does not mean you can’t get approved. Poor credit and no credit applicants can still be approved but will have higher interest rates. To make homeownership possible for those with low or no credit, some loans are designed to be more forgiving than others. If you have low credit, think about applying for a Federal Housing Administration loan, which requires a score of 500 to qualify.
There are many misconceptions about applying for your mortgage. But with thorough research and the help of a Simply Referable real estate agent, you’ll be on the right track to owning your own home!
Mortgage Misconceptions with Simply Referable
The small team of realtors at Simply Referable is deeply focused on creating a memorable selling experience for you and your family. Each of our team members has an area of expertise, and we strive to form lasting bonds with each of our clients. We want to be your go-to realtors every time you or a friend wants to make a change. With local experience, our realtors can help you choose a house that is just the right fit for your family, now and forever. Contact us online or give us a call at 410-983-9045.