Mortgages are kind of complicated. Luckily for home buyers, there are experts out there that can help to make sense of the confusion. With these being said, there’s a lot of fear that surrounds mortgages based on a few bad rumors that ruined their reputation. Most of these myths are clouded with misinformation, so hopefully, I can help to clear those up by taking a look at some of the top myths about mortgages out there today.
Once you’re pre-qualified, your loan is a guarantee.
This is likely the most confusing part about a loan. What exactly are you doing when you’re getting pre-qualified? Well, as frustrating as it might sound, you’re really only getting a general statement of what you can afford. It’s important to remember that you’re only getting pre-qualified, and the actual terms of your loan can change when you start putting those wheels into motion. This misunderstanding can give mortgages a bad rep, but really the misinformation came with the pre-qualification and not the actual mortgage itself.
Your mortgage payment should be 28% of your income.
This is another falsehood. There are a ton of factors that will influence your down payment. While 28% is a great down payment that will give you perhaps a more manageable monthly payment, you must factor in all kinds of spending before you determine your down payment. For instance, do you have any debt? Are there monthly expenses that you have to save for? Remember these things when looking at how much money you have to give away.
Paying off your mortgage as soon as possible is crucial.
You don’t have to pay off your mortgage any more quickly than the time given on your mortgage terms. Think of this like your credit, because, actually, it really does effect your credit. Making the monthly payments in a consistent manner will help to build your credit. And the interest that you make off of this investment could one day outrank the interest you’re paying on your mortgage rate.
This list of myths is just the tip of the iceberg when it comes to mortgage misunderstandings. Stay tuned for more mortgage tips and even more myths debunked in the coming months.