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Mortgage Myths #6-10

Mortgage Myth #6: No gifts or grants are allowed for a down payment.

Truth: You are allowed to use gifts and grants to help your down payment for qualifying loan types, and as long as the sources are documented.

Mortgage Myth #7: Getting pre-qualified is the same as getting pre-approved.

Truth: Though these two terms may sound the same, there is a world of difference between them. When you pre-qualify for a home loan, you are getting an estimate on the amount that you would be eligible to borrow based on the information you provide about your finances, as well as a credit check. This amount will give you a general idea of what your price range should be. A pre-approval takes the pre-qualification one step further and is issued after the lender has reviewed your financial documents and has verified the information you provide. Once pre-approved, you’ll receive a pre-approval letter, which is an offer but not a commitment, to lend you a specific amount. A pre-approval lets the seller know that your offer is more solid because the lender has actually reviewed all of your documentation and is not just going off of a conversation.

Mortgage Myth #8: Find a home first, and then worry about financing. 

Truth: This is a very painful lesson for many first-time buyers who fall in love with a home only to learn that they cannot qualify. That’s why it’s important to consult with a lender before you embark on your home-buying journey. A lender will ask a few questions about your finances and will check your credit to get you pre-approved. This process will give you a good idea of your price range, and of any credit hurdles you may need to overcome to secure a lower interest rate; potentially saving thousands over the life of your loan.

Mortgage Myth #9: The mortgage process is fraught with obstacles and an excessive amount of paperwork.

Truth: Getting a mortgage is now simple because we have lenders waiting to help you out every step of the way. Much of the process is digital and all required documents are submitted literally in the palm of your hand via your Smartphone. All of the helpful tech such as e-fax, mortgage apps, and website features, allow for a simplified mortgage process.

Mortgage Myth #10: Millennials are not buying homes and all live with their parents.

Truth: The Millennial homeownership rate has climbed 47.9% from 40% just three years ago according to the report from Apartment List’s Homeownership report; accelerating a five-year trend in millennial homeownership rates rising as the fastest. 

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