Mortgage myths are everywhere on the digital forum, and it may make it hard for you to understand what is right and wrong. Experts are here to clear up the common mortgage myths so that you can understand what options you have in front of you. You must also know the truth about getting mortgage loans and purchasing your dream home.
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You don’t require a down payment
One common myth about mortgage loans is that you must give a 20% down payment when purchasing the residence. Most individuals believe that first-time buyers have to make this payment. However, it is not valid. If you look at a conventional loan, you may purchase a house with as low as a 3% down payment.
Some categories of government-backed mortgages even do not require that payment at all. The 20% of myths are thereby baseless. If you look at the websites and blogs of experts, you will understand that mortgage lenders are here to help you. You do not have to make any down payment to purchase your house or get a loan.
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Pre-qualification is pre-approval
The main distinction between pre-qualification and pre-approval is the verification level that the lender requires before they will issue the loan. Pre-qualification is when the lender will grab basic monetary information about you. Most Pierremont Mortgage, Inc. of Shreveport lenders rely upon self-reported economic data when issuing pre-qualification.
It means that the lender only provides a rough estimate of the amount you can afford. Pre-approval, on the other hand, is the second step. The lender has already verified your monitoring information, and they want you to submit the bank statement with other documents so that they can credit the loan to your account.
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You cannot pay your loan early
This is false. Some lenders will help you with the option of paying off your mortgage early. If you have the necessary resources, then you are comfortable spending your loan earlier; you are most welcome. Lenders earn resources on loans when they pay the interest that they have borrowed. The longer your loan stays, the more money the lender will get. If you pay off the loan soon, the lender will earn a bit less, but they will not be at a loss.
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Down payment and closing cost
As per Chiang Rai Times, when people think of purchasing a house, the first thought that comes to their mind is the down payment. The down payment is the vast sum of money you must pay when investing in the house, but you also need to pay the closing cost. Closing cost is the processing fee that you pay to the lender when they finalize and create your loan. Closing costs will cover things such as the appraisal price and title insurance. Like the down payment, the closing cost is due when closing the home loan.
Find out more details before making any financial decision by contacting the experts. Get all your confusion cleared before you decide to apply for a mortgage.
