{"id":12100,"date":"2019-09-04T09:05:09","date_gmt":"2019-09-04T16:05:09","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=12100"},"modified":"2024-03-19T06:44:21","modified_gmt":"2024-03-19T13:44:21","slug":"mortgage-myths-you-should-dismiss","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/","title":{"rendered":"The 6 Common Mortgage Myths You Should Dismiss"},"content":{"rendered":"

You\u2019ve heard all the outdated and incorrect mortgage advice. Like you have to make a 20% down payment, or you can\u2019t buy a home in a competitive market<\/a> without an all-cash offer. Nonsense!<\/p>\n

There are so many myths surrounding mortgages, it can be intimidating for homebuyers.<\/p>\n

Plus, it\u2019s hard to get a straight answer to your mortgage questions, what with wildly contradictory and outdated advice dominating internet search results.<\/p>\n

We think it\u2019s time to debunk these pervasive mortgage myths once and for all. Here\u2019s the top 6 myths you need to know:<\/p>\n

\"A<\/a>
Source: (picjumbo\/\u00a0Pixabay<\/a>)<\/figcaption><\/figure>\n

Myth #1: Applying with multiple lenders will hurt your credit<\/h2>\n

When you\u2019re applying for a mortgage, you want to keep your credit score in tip-top shape<\/a>. It\u2019s a good idea to keep your credit card balances below 30%<\/a>, and to avoid making any big financial moves that could affect your debt-to-income ratio (like taking out a loan for a new car).<\/p>\n

Credit inquiries are a necessary part of applying for a mortgage, but they do put a small dent in your credit score.<\/p>\n

For most people, one additional credit inquiry will shave less than five points off their FICO Scores<\/a>. Why? Inquiries signal to creditors that you\u2019re thinking about taking on new debt, explains the Consumer Financial Protection Bureau<\/a>.<\/p>\n

But what about rate shopping? The truth is, it\u2019s possible to shop around for a mortgage without it hurting your credit, so long as you do it within a 45-day window, explains the CFPB<\/a>.<\/p>\n

Within this 45-day period, multiple credit checks from mortgage lenders are counted on your credit report as a single inquiry, allowing you to get pre-approvals and Loan Estimates from as many lenders as you\u2019d like.<\/p>\n

Myth #2: You need 20% Down To Buy A Home<\/h2>\n

The average down payment for first-time homebuyers is 5%, according to a report from the National Association of REALTORS\u00ae.<\/p>\n

Sellers are able to leverage the cash they\u2019ve earned from their home sales to put an average of 14% down on a new home.<\/p>\n

But, altogether, the median down payment<\/a> is 10%, according to The 2017 NAR Profile of Home Buyers and Sellers.<\/p>\n

If you\u2019re waiting to reach a 20% down payment goal<\/a>, you could be missing out on ideal market conditions and letting the best interest rates surpass you. Even if you can afford to put 20% into a down payment, it might make better sense to keep some of your funds liquid.<\/p>\n

Of course, there are benefits to making a large down payment. A 20% (or larger) down payment can significantly reduce your interest rate, saving you thousands over the life of the loan. And it can help you avoid private mortgage insurance<\/a> if you\u2019re going the conventional loan route.<\/p>\n

The truth is, there is no one-size-fits-all down payment. Everyone\u2019s financial situation is different. Always consult with a trusted real estate agent<\/a> and financial advisor before deciding how much to put down on your new home.<\/p>\n

\"\"<\/a>
Source: (picjumbo\/ Pixabay<\/a>)<\/figcaption><\/figure>\n

Myth #3: Once you\u2019re pre-qualified, you\u2019re good to go<\/h2>\n

The terms pre-qualified and pre-approved<\/a> almost sound as though they could be interchangeable. But there\u2019s actually quite a big difference between the two.<\/p>\n

Being pre-qualified for a home loan is simply an initial step that gives you a ballpark idea of how much you\u2019ll be able to borrow<\/a>. You provide information about your financial situation, such as your income, credit score, assets and debt, and you can become pre-qualified.<\/p>\n

But pre-approval occurs when your financial information has been assessed and verified, making you a stronger buyer, and more likely to get to the closing table.<\/p>\n

Myth #4: You need a perfect credit score to get the best rate<\/h2>\n

Trying to polish your credit score and get it above 800 isn\u2019t necessary when it comes to qualifying for the best mortgage rates.<\/p>\n

Plus, if you\u2019re waiting for your score to ascend to the 800 club, or even go up 10 or so points, you could be letting good rates and ideal market conditions pass you by.<\/p>\n

A score of 760<\/a> or higher will help you secure the best rates for loans. If you\u2019re above 760, that\u2019s great, because you\u2019ll have a buffer in case your score fluctuates between being pre-approved and getting to the closing table.<\/p>\n

If your score isn\u2019t 760, that\u2019s okay, too. You can still qualify for competitive rates.<\/p>\n

\"A<\/a>
Source: (Milly Eaton\/ Pexels)<\/figcaption><\/figure>\n

Myth #5: You should pay your mortgage off quickly<\/h2>\n

Congrats! You\u2019ve got a mortgage. You may have heard that you should pay it down as quickly as possible. But, this is outdated advice that doesn\u2019t make much sense in today\u2019s economy.<\/p>\n

Why? A mortgage is likely the cheapest money you can borrow. Where else can you get a million-dollar loan at 5% interest for 30 years?<\/p>\n

Plus, the interest you pay on your mortgage is tax-deductible and making regular monthly payments on a mortgage account will have a positive impact on your credit score, lengthening your credit history.<\/p>\n

Taking the money you would otherwise use to pay down your mortgage faster, and investing it instead, could actually make you more money. Always talk with a financial advisor first, but know that you have options.<\/p>\n

Header Image Source: (stockfour\/ Shutterstock)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

We’ve all heard incorrect mortgage advice. Like you have to put 20% down, or you can\u2019t buy a home in a competitive market without cash. Nonsense!<\/p>\n","protected":false},"author":126,"featured_media":12106,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[629,632],"tags":[],"class_list":["post-12100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-home-financing","category-mortgage-loans"],"acf":[],"yoast_head":"\nThe 6 Common Mortgage Myths You Should Dismiss<\/title>\n<meta name=\"description\" content=\"We've all heard incorrect mortgage advice. Like you have to put 20% down, or you can\u2019t buy a home in a competitive market without cash. Nonsense!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The 6 Common Mortgage Myths You Should Dismiss\" \/>\n<meta property=\"og:description\" content=\"We've all heard incorrect mortgage advice. Like you have to put 20% down, or you can\u2019t buy a home in a competitive market without cash. Nonsense!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/\" \/>\n<meta property=\"og:site_name\" content=\"HomeLight Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/gohomelight\/\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-04T16:05:09+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-03-19T13:44:21+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/hl-blog.homelight.com\/wp-content\/uploads\/2019\/08\/applying-with-multiple-lenders.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1500\" \/>\n\t<meta property=\"og:image:height\" content=\"800\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Brittany Anas\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:site\" content=\"@gohomelight\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Brittany Anas\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"The 6 Common Mortgage Myths You Should Dismiss","description":"We've all heard incorrect mortgage advice. Like you have to put 20% down, or you can\u2019t buy a home in a competitive market without cash. Nonsense!","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/","og_locale":"en_US","og_type":"article","og_title":"The 6 Common Mortgage Myths You Should Dismiss","og_description":"We've all heard incorrect mortgage advice. Like you have to put 20% down, or you can\u2019t buy a home in a competitive market without cash. Nonsense!","og_url":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/","og_site_name":"HomeLight Blog","article_publisher":"https:\/\/www.facebook.com\/gohomelight\/","article_published_time":"2019-09-04T16:05:09+00:00","article_modified_time":"2024-03-19T13:44:21+00:00","og_image":[{"width":1500,"height":800,"url":"https:\/\/hl-blog.homelight.com\/wp-content\/uploads\/2019\/08\/applying-with-multiple-lenders.jpg","type":"image\/jpeg"}],"author":"Brittany Anas","twitter_card":"summary_large_image","twitter_creator":"@gohomelight","twitter_site":"@gohomelight","twitter_misc":{"Written by":"Brittany Anas","Est. reading time":"5 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":["Article","BlogPosting"],"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#article","isPartOf":{"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/"},"author":{"name":"Brittany Anas","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/19ba461909a03308bf76430b21ce0213"},"headline":"The 6 Common Mortgage Myths You Should Dismiss","datePublished":"2019-09-04T16:05:09+00:00","dateModified":"2024-03-19T13:44:21+00:00","mainEntityOfPage":{"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/"},"wordCount":897,"publisher":{"@id":"https:\/\/www.homelight.com\/blog\/#organization"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#primaryimage"},"thumbnailUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/08\/applying-with-multiple-lenders.jpg","articleSection":["Financing","Mortgages & Loans"],"inLanguage":"en-US"},{"@type":"WebPage","@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/","url":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/","name":"The 6 Common Mortgage Myths You Should Dismiss","isPartOf":{"@id":"https:\/\/www.homelight.com\/blog\/#website"},"primaryImageOfPage":{"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#primaryimage"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#primaryimage"},"thumbnailUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/08\/applying-with-multiple-lenders.jpg","datePublished":"2019-09-04T16:05:09+00:00","dateModified":"2024-03-19T13:44:21+00:00","description":"We've all heard incorrect mortgage advice. Like you have to put 20% down, or you can\u2019t buy a home in a competitive market without cash. Nonsense!","breadcrumb":{"@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#primaryimage","url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/08\/applying-with-multiple-lenders.jpg","contentUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/08\/applying-with-multiple-lenders.jpg","width":1500,"height":800,"caption":"Source: (stockfour\/ Shutterstock)"},{"@type":"BreadcrumbList","@id":"https:\/\/www.homelight.com\/blog\/mortgage-myths-you-should-dismiss\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.homelight.com\/blog\/"},{"@type":"ListItem","position":2,"name":"The 6 Common Mortgage Myths You Should Dismiss"}]},{"@type":"WebSite","@id":"https:\/\/www.homelight.com\/blog\/#website","url":"https:\/\/www.homelight.com\/blog\/","name":"HomeLight Blog","description":"Real Estate Advice from America's Top Agents","publisher":{"@id":"https:\/\/www.homelight.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.homelight.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.homelight.com\/blog\/#organization","name":"HomeLight","url":"https:\/\/www.homelight.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2017\/11\/logo-hr-color.png","contentUrl":"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2017\/11\/logo-hr-color.png","width":1348,"height":262,"caption":"HomeLight"},"image":{"@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/gohomelight\/","https:\/\/x.com\/gohomelight","https:\/\/www.linkedin.com\/company\/homelight\/","https:\/\/www.youtube.com\/channel\/UCimugR9XF17-OZ7B9fNnxWw","https:\/\/en.wikipedia.org\/wiki\/HomeLight"],"description":"Everything you need to know to sell your house faster and for more money. Articles, guides, and advice from top agents all over the U.S.","email":"support@homelight.com","telephone":"(888) 688-0350","legalName":"HomeLight","foundingDate":"2012-01-01","numberOfEmployees":{"@type":"QuantitativeValue","minValue":"201","maxValue":"500"}},{"@type":"Person","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/19ba461909a03308bf76430b21ce0213","name":"Brittany Anas","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.homelight.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/352a981baa293f7d0f0974da9b6bd4c46be78e7b361372b8d986d55014cdc37a?s=96&d=blank&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/352a981baa293f7d0f0974da9b6bd4c46be78e7b361372b8d986d55014cdc37a?s=96&d=blank&r=g","caption":"Brittany Anas"},"description":"Brittany Anas is a Denver-based real estate, travel and lifestyle writer. She has 15 years of experience in daily newsrooms, including with The Denver Post and the Daily Camera and has been featured in The Denver Post, 5280, American Way, Simplemost, Make it Better, Men\u2019s Journal, USA Today Travel Tips, AAA publications, Reader\u2019s Digest, TripSavvy and more.","url":"https:\/\/www.homelight.com\/blog\/author\/brittany-anas\/"}]}},"_links":{"self":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts\/12100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/users\/126"}],"replies":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/comments?post=12100"}],"version-history":[{"count":0,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/posts\/12100\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/media\/12106"}],"wp:attachment":[{"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/media?parent=12100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/categories?post=12100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.homelight.com\/blog\/wp-json\/wp\/v2\/tags?post=12100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}