As with nearly every other industry, there are some common “myths” that are associated with mortgages and the mortgage process that may hold some people back from pursuing their options when it comes to purchasing a home.
I have covered some of these topics in previous posts, going more into detail about credit and pre-approvals, but as a trusted Red Deer mortgage broker, I wanted to give you a more compiled list about the truth behind some of the most common mortgage myths.
Getting the Lowest Rate Means You Are Getting the Best Mortgage
We all know that interest rates can affect how much you pay for your mortgage on a monthly basis so the higher your interest rate is, the more you will end up paying over the life of your loan.
This does not mean that interest rates are the only thing that you should consider when it comes time to make important decisions about your mortgage. There are plenty of other things to consider, such as origination fees and closing costs.
For some people, even the different loan options provided by a broker, or the broker’s availability to their clients could make all the difference.
Pre-Approvals and Pre-Qualifications Are the Same Things
This is not true and believing this myth can cause lots of problems for borrowers further down the road in their mortgage process.
To obtain a pre-qualification, all that is required is a quick glance at your finances and a conversation with a mortgage professional. Your financial situation is barely considered during this process, making a pre-qualification relatively useless, unless you are just looking for a general idea of what you might be approved for.
During the pre-approval process, you will be required to fill out a complete mortgage application. Your mortgage professional will also pull your credit report and dig further into your current financial situation as well as your finances in the past. This process is much more in-depth than the pre-qualification process, giving a pre-approval much more weight. Obtaining a pre-approval means that you have essentially been approved for your mortgage and gives you a better tool to use in the home-buying process.
Please remember, though, that a pre-approval is not an approval. Things can still change, so it is important to maintain contact with your Red Deer mortgage broker throughout the process to make sure there is nothing that comes up unexpectedly.
You Must Have 20% for a Down Payment
While it is ideal to put more money down up front, that does not mean that you have to. There are now more options than ever for potential borrowers who have less than 20% to put down on the purchase of their home.
As an experienced Red Deer mortgage broker, I am always happy to help my clients find the mortgage options that work the best with their current financial situation. Whether you are working with a small down payment, curious about different rate options, or need a pre-approval, you have come to the right place! As an experienced Red Deer mortgage broker, I am always happy to help my clients find the mortgage options that work best for your situation.
Give me a call today to find out more!