08/08/2023
Letโs bust some mortgage misconceptions! These are the 3 most popular misconceptions I hear all the time as a loan officer:
1. A 20% down is always required โ While a higher down payment can help you avoid private mortgage insurance (PMI) or potentially get better loan terms, we have loan programs that require low down payments โ such as FHA loans โ or even 0% down โ such as VA* or USDA loans. According to the National Association of Realtors, the median down payment on a home in 2022 was just 13%.
2. The interest rate is the most important factor โ Weโre hearing a lot about interest rates lately. They are an essential part of a mortgage, but not the only factor. Other factors, such as loan term, closing costs, and loan type, can significantly impact the overall cost of the mortgage.๐ฒ๐ฒ Itโs important to look at the whole picture vs just the interest rate.๐
3. Itโs better to pay off your mortgage as quickly as possible โ Mortgages often come with a relatively low interest rate ๐ compared to other types of debt. Instead of focusing solely on an early mortgage payoff, it may be more beneficial to invest any extra funds in higher-yield investments or retirement accounts. Consider your long-term financial goals and make sure to consult with a financial advisor to make an informed decision.
Have other thoughts about mortgages that you want to know if they are misconceptions or not? Send me a DM! Iโm always here to help! ๐ฒ๐ป
*Down payment waiver is based on VA eligibility.
