Dispelling Mortgage Myths

by Alice Quinlan 08/18/2019

Myths are lies that are perceived to be true. Like every other industry in the world that has myths surrounding them, the real estate industry has its tales. People have ideas in their head about the mortgage industry that are not true. If you are buying a house and all you feel is happiness, then you might be working with a myth you heard and perceive as being real; same also applies if you are buying a home and all you feel is dread. 

Below are a few mortgage misconceptions that many buyers and sellers mistake for truth:

You Need A Near-Perfect Credit Score

It's essential to have a high credit score, but lack of it doesn't mean you are out of the game. Even if you have some credit blemishes but always ensured you paid your bills, you probably won't have a lot to worry about. If you are bothered about your credit score, other factors could offset adverse credit. Depending on your loan type, each situation is analyzed differently. 

A Down Payment of Twenty Percent Is Needed

Compulsorily providing 20% of the purchase value of the home as a down payment is also a myth. Making a down payment of 20% is helpful in the long run, especially to avoid paying monthly insurance to a private mortgage company. Presently, mortgage companies and banks provide loans to individuals without requesting for a down payment close to 20%. It all depends on your financial situation.

A House Is an Excellent Investment

A home could be considered as a long-term investment if you do not intend on living in it – but then, nothing in the real estate business is guaranteed. If you purchase a house to live in for several years, it's better you don't think about it as a financial tool for padding your investment or retirement plan. Buying a house is part of your net worth, but you shouldn't count on getting a return after investing much money into the home. Something most home buyers fail to understand is that the value of houses appreciates at a shallow rate and can have negative growth for long periods. 

The House Belongs to You After You Get the Keys

It's one of the myths that homebuyers assume is true. When you purchase a house via mortgage; if you do not have equity or a significant amount as down payment, your bank owns your home. For as long as it's required to finalize payment for your home - including interest, the house doesn't belong to you.

The American Dream 

In as much as owning a home is supposed to be the American dream; it can also be the American nightmare. Acquiring a home via a mortgage and not being able to meet up with the payments can turn out to be your worst nightmare. Owning a home is a decision that requires thorough thinking without jumping into any decision 

Buy a house if you can afford it but be sure you have your facts right.

About the Author
Author

Alice Quinlan

Alice Quinlan is the one to get it DONE! Direct|Determined|Driven, Alice’s first step towards “getting it done” is to listen well and to understand what her buyers and sellers want and need in order to achieve their dream of owning their own home. She is a Certified Negotiation Expert! Alice is a Jersey Girl but has had the pleasure of calling Colorado home for many years. She has three children who have all attended school in Douglas County. In her free time, she loves attending concerts, baking, traveling and exploring all that Colorado has to offer. Alice and her husband have moved several times in the past 30 years making her an expert on relocating with a family. Alice knows what it takes to move a family across the country or across town. She is your relocation expert! Alice also knows what it takes to get into and out of the real estate market. Whether you’re looking to buy,sell or invest in real estate, Alice is committed to providing you with exceptional service. Alice’s goal is to guide you through your real estate transaction from start to finish while keeping you informed every step of the way. Give Alice a try and watch her exceed your expectations!