A home is perhaps the most expensive item you have ever or will ever buy. That said, you need to be enlightened about things related to home buying before you start the process, including the misconceptions. You must be confident when buying and avoid the common misconceptions about mortgages.
1. Getting pre-qualified is the same as getting approved
If you are considering buying a home, pre-approval is important because it gives you an idea of the cost of the house so that you can set a budget. However, it is not a guarantee that you have been officially approved for the stated amount. Your lender looks at your properties or assets and credit report during the pre-qualification stage.
A pre-approval is more detailed because the lender analyzes more about your financial well-being. Therefore, don’t be deceived to stop worrying about your credit after the pre-approval process.
2. It’s cheaper to rent a house than to take a mortgage
People think that it is cheaper to rent a home than to pay for a mortgage in Sandy, Utah and other places. On the contrary, paying a mortgage is less expensive than renting a comparable home. Being a homeowner gives you the opportunity to grow your wealth slowly rather than throwing your money away every month by renting a property.
3. Mortgage rates are the same everywhere
One of the most common mortgage myths is that the rates are the same regardless of where you are. The truth is that most credit unions charge lower rates than most big banks because the latter has more fees than credit unions. Therefore, you need to research and shop around for affordable mortgage rates that will make a significant difference in your monthly payments.
Buying a home is a big decision that you don’t want to mess with making a wrong decision. People spend time searching for an affordable mortgage and the right property. Now that you have learned the truth about mortgages, you may start your home buying process.