Top Ten Mortgage Deals Misconceptions

When speaking of mortgage, people find this very tricky and often do not understand. This is because people seldom do not buy a home. Home owners do not engage in educating themselves regarding the procedure of mortgages since they are busy doing household chores and no time for that. However, homeowners must bear in mind, that it is very important to have enough knowledge regarding mortgage so that when the time comes that they need to purchase a home, they have fully understood the whole idea and process.

Today, the real estate market is flourishing and some experts compiled some listings of top ten mortgage deals misconceptions based on the latest mortgage IQ survey.

The Percentage Rate Is the Total Cost of the Mortgage

People think that the total amount of their mortgage is based on the percentage rate of what they are paying for. However, the APR (annual percentage rate) is considered as the figure that stands for the mortgage real cost and not on the percentage itself. This encompasses the interest rate, insurance of the mortgage, points, underwriting fees and a lot more. This does not involve insurance policy cost of the homeowners.

Bear in mind that the APR is higher compared to the interest rate since this involves fees and rates. To get the most deals when looking for the mortgage, make a comparison basing on the APR and not on the interest rate.  This method could give you a better idea of the overall cost more than the maturity period of the loan itself.

Mortgage Interest Rates Released Once A Day

The mortgage interest rates of some types are frequently changing. Sometimes, these are released all day. This is because there is a rapid change in the interest of the mortgage. That is why; it is recommended to shop or look around for mortgage to avail the best deals and get plenty of loan quotes.

The Law Does Require that Lenders Shall Charge Standard Fees for Credit and Appraisal Reports

In fact, the law does not require the lenders for this kind of services like credit and appraisal reports.  However, to make the quotes of the loan to become more competitive, lenders waive the charges for the services. And in this case, lenders are charged with higher fees and this is one of the reasons that they are encouraged to look or shop around.

Get the Mortgage from the Same Lender That One that Is Pre-Approved Already
Homeowners must be mindful enough that the so called conditional agreement that approximately amount of the loan that came from the lender is called pre-approval. This involves your credit examination and also the verification of your income. In this case, you have no obligation to go to the lender that issues you this pre-approval condition. Before going to your mortgage, get at least more than 3 loan quotes.

If You Have a Checking Account in the Bank, One Will Get the Finest Interest Rates on Mortgages

This is not the case maybe to consider since even though you are doing banking with them, it is impossible for the bank to give you a discount. Banks have their own protocols. To get the most deals regarding mortgage, get multiple quotes of at least 3 or more from different lenders in your locality or perhaps you can search it online. Choose the best that suits you.

When Applying For a Mortgage Together With Your Husband or Wife, Lenders Look Both of Your Credit Standing To Know the Interest Rate that You Are Qualified

In this case, if both of you are applying for the mortgage, usually the lender will get both of your credit standings from the 3 credit agencies. The lender then gets the middle score and gets the lowest in order to know the interest rate of the mortgage. In this way, the person with the least credit has the greatest effect when it comes to the monthly payment.

If Your Down Payment Is Less Than 5%, You Cannot Get a Desired Home Loan

Having a down payment of ten percent and up on the home is a misconception. However, with 3.5 percent down, you can get a mortgage from the FHA (Federal Housing Administration). The FHA is considered as the most well known loan options for people who cannot afford a big down payment and with bad credit history. This kind of loan is for everybody and not only applicable for first time home buyers. Aside from the FHA, there are also some agencies out there that can help you. The loan also requires no down payment and this is advantageous for people who have no cash on hand.

Wait For At least 7 Years To Have Another Home Loan Again If You Engage In Foreclosure Or Short sale

When it comes to buying a home after a foreclosure, you need at least 2 to 4 years before you can have another home loan and not to wait for 7 years. However, this depends on the type of loan and the down payment. Even though you have good credit standing and getting another mortgage is affordable for you, you still need to wait for several years to avail another loan.

When Your Loan Could Be Hardly Paid Because Of Too Little Income, You cannot obtain a Refinancing.

Millions of people are suffering from underwater loan and their mortgage can be refinanced with the help of government programs like Home Affordable Refinance Program (HARP) and the FHA Streamline Refinance.

A Home Loan Can Be Refinanced Every Year

Today, with the assistance of the two government programs like HARP and FHA Streamline Refinance, you can refinance as often as you want when the financing does not involve cash out.

Those are the top ten mortgage deals misconceptions that you should know that could guide you on your home mortgage loan.


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