When you’re thinking about buying a home, it seems everyone has suggestions for you, many of which aren’t very helpful. Some people might be working on old assumptions that were relevant decades ago, such as the idea that a single person is less likely to get a loan, while others might be offering advice based on myths they themselves used to guide their own process. Regardless of the source, misinformation can discourage and confuse you, so let’s banish some of the most common misconceptions about the mortgage and home buying process so you enter the housing market with confidence.
Myth #1: The process is confusing and difficult
It’s understandable where this myth comes from: after all, we tend to look at a process with many steps and get overwhelmed, thinking there’s no way that we can keep that all in mind as we hunt for our home. However, a bit of preparation can make the steps much more straightforward.
By using a guide that outlines the basic process, you’ll get a simple outline of what you need to do. Input this into the planning document of your choice, then customize it for your situation; for example, if you already know you’d like to move into a certain neighborhood with which you’re very familiar, the process of researching the towns and neighborhoods can be abbreviated. Make sure to keep your planning focused on action items that are clearly defined, such as making a budget or checking your credit score.
Myth #2: You’re at the mercy of third parties every step of the way
This myth intimidates many people, who think that they’ll have little influence over how their mortgage rate or even what lender they can choose. However, you actually have far more say over how this process goes than you might think, and there’s plenty you can do to up your chances of getting an excellent rate and a beautiful home.
If you go back to your planning document, you’ll see that there’s a lot that hinges upon your own actions, like determining how much you can really afford, paying down your debts, choosing whether to work with a mortgage broker or a direct lender, and selecting your real estate agent. If having more say over the process intimidates you, there’s also plenty you can outsource to others, such as using a financial advisor to prepare all the documents you’ll need for preapproval or a credit rehabilitation company to work on your credit score. It all depends on how much you feel you can handle on your own, and who you’d like to help you. Remember that those third parties have experience that you can use to make great decisions about your home-buying process: for example, a mortgage broker can advise you on exactly what you need to guarantee a good mortgage rate, and they’ll shop around for you so that you can get the very best interest rate possible.
Myth #3: You’re stuck with your mortgage rate forever
Staying on the topic of mortgages and interest rates, many believe that you’re going to be “locked in” to a mortgage rate, good or bad, for the life of the mortgage. If you bought at a time of high interest, you might think you’re going to be paying that forever, but that’s simply not true.
In the mortgage industry, there’s a saying that you “marry the house, date the rate.” In other words, you select a house that you love, choose a lender, and then refinance after a certain period when you find a more favorable interest rate. This process is made much easier with a mortgage broker District Lending, who can alert you when interest rates drop and help you refinance your home with minimal hassle or stress.
Knowing ahead of time that you can refinance when economic circumstances change – and that the process isn’t as scary and complicated as you might think – can help you feel more confident about signing those documents, aware that the interest rate isn’t a 30-year sentence, but a mutable aspect of your finances.
It’s natural to be intimidated by the process of buying a home, especially if this is your first house or you’ve been off the housing market for a while. However, you have much more agency and flexibility than you might realize, and there’s much you can do to ease the hassle of securing a mortgage and closing the deal. Banishing the myths of home buying is an important part of the process, so educate yourself on the current circumstances of accessing a mortgage and go forth with confidence.