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Mortgage Basics

5 Common Mortgage Myths

September 05, 2019
We're setting the record straight on the most common mortgage myths.

Getting a mortgage is something the average consumer only does one or two times in their life. Unless you’re doing it all day every day, you’re probably not super familiar with the entire process. You may even buy into some of the most common mortgage myths. That’s where we come in! Waterstone Mortgage loan originators are experts at what they do, so you can rest assured they’ll walk you through every detail of the mortgage process so you understand what’s going on. Before you take that leap, let’s go over some of the biggest mortgage myths so we can put your mind at ease.

Myth: The process of getting a mortgage is long, excruciating, and involves boatloads of paperwork.

Fact: We might be biased, but nothing is excruciating about the mortgage lending process.

We know what you’re thinking: “That’s easy for you to say, you’re a mortgage lender!” Fair enough. Objectively speaking, Waterstone Mortgage has the tools to make the homebuying process go as quickly and seamlessly as possible. Not only do we close our loans on time, but we also close quicker than the majority of other lenders. Our pre-approval process and technology tools allow you to easily submit documents and information, all while having a direct line of communication with your loan originator.

Myth: You don’t need a Realtor to buy or sell a house.

Fact: Working with a Realtor provides endless benefits and will make the buying/selling process much easier.

With today’s technology advancements, we certainly have access to a wealth of information. However, nothing beats working hand-in-hand with a registered real estate agent. Their expertise is second to none — they know the local neighborhood, market conditions, and how to negotiate in your favor.

Once you’ve been pre-approved (so you know how much house you can afford), a Waterstone Mortgage loan originator can connect you with a Realtor in your area.

Myth: You need a perfect credit score to get a mortgage.

Fact: If your credit score is less-than-perfect, chances are you may still qualify for a mortgage loan.

There are loan options for those with less-than-perfect credit scores. If you’re looking to improve your credit regardless, there are several steps you can take to do so, such as reducing the amount of debt you owe.

Myth: A 20% down payment is required — no matter what.

Fact: You do not need to put 20% down to purchase your home. You might not even need any money down!

There’s absolutely nothing wrong with a large down payment; that is what works best for some homebuyers. If you can justify putting 10-20% down on your home, have no fear. There are plenty of no- and low-down-payment mortgage options to suit your needs.

Myth: Fixed-rate mortgages are better than adjustable-rate mortgages (ARMs).

Fact: One isn’t better than the other — just different, depending on your needs.

Fixed-rate mortgages experience the same interest rate throughout the entire life of the loan, which is decided upon before you close your loan. An ARM, however, provides you with an introductory interest rate for the first 5-15 years of the loan (depending on which specific program you choose). After that initial period, your interest rate is susceptible to change with market conditions for the remainder of the loan.

Hearing that your interest rate could possibly increase is intimidating for many homebuyers, which fuels this misconception. And there’s a chance a fixed-rate loan could still be the right option for you. ARMs have their benefits, though! They provide an affordable option for homebuyers who are looking to have lower monthly payments at the start of their loan (as the initial interest rate is often lower than a fixed rate) and can be an ideal option for those who are not looking to stay in their home for a full 30+ years.

Now that we’ve cleared the air, ready to take the next step and meet with a loan professional? Find a Waterstone Mortgage loan originator in your area.