4 Mortgage Myths Debunked

The mortgage industry can be complicated. There are a lot of myths and misconceptions surrounding the process of obtaining a mortgage at the Lake of the Ozarks. In today's blog, the best mortgage lender in Osage Beach is here to offer the truth behind some of those common myths you've likely heard.

1. You Have to Have a 20% Down Payment. 

Probably the biggest myth about mortgage loans is that you have to put 20% down. While this figure was typical in the past, some programs now allow for as little as 0% down. The minimum amount for your down payment will vary by lender and loan program. The only thing to keep in mind is that when you put less than 20% down, you will be required to pay private mortgage insurance. In addition, the more you're able to put down upfront, the better deal you'll be able to get and the more money you can save in the long haul. You will also start out with more equity in your home.

2. You Have to Have Good Credit to Purchase a Home. 

The other myth that you hear a lot is that you can't purchase a home if you have a low credit score. While this is not true at all, it is true that a good credit score will get you better rates. There are programs available to assist buyers with low credit scores, however, the interest rates on those programs are going to be higher. You also may be able to offset the negative factor of a low credit score by offering up a larger down payment or meeting other qualifications. For most people, credit alone is not a show stopper when purchasing a home.

3. Once You're Pre-Qualified, You're Set on Your Loan. 

Many people don't understand the differences between a pre-qualification, a pre-approval and a mortgage approval. Being pre-qualified for a certain amount does not mean that you will be approved for a loan in that amount. A pre-qualification is a simple process that gives you a crude estimate of how much you might qualify for in a mortgage. A pre-approval is a much better indication of how much you'll qualify for and even what type of interest rate you will be offered, because your file is actually reviewed by an underwriter prior to you finding a property.

4. Your Interest Rate Reflects the Cost of Your Mortgage. 

While you obviously want to get a low interest rate on your mortgage, the interest rate isn't the only number to be concerned with. All mortgages have other fees that are rolled into the cost of your loan. These fees are reflected in the APR. Don't get caught up on the lowest interest rate, because a loan option with a slightly higher interest rate, but a lower APR, is going to be the better deal. When comparing loan options and lenders, you'll want to compare the APR, not the interest rate.

As your Lake of the Ozarks mortgage lender, I'm here to help you understand the mortgage process. I'll discuss your Lake of the Ozarks home financing needs, offer competitive interest rates and back it up with the first-class service you deserve. Give me a call today at 573-746-7211 to get started on your mortgage approval today!

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Michael Lasson

Senior Loan Officer

NMLS #: 493712

4655 B Osage Beach Parkway

Osage Beach, MO 65065

Direct: (573) 746-7211

Cell: (573) 216-7258

e-Fax: (866) 397-0318

Email: mlasson@fsbfinancial.com

Website: www.YourLakeLoan.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.