Common Misconceptions About Getting A Mortgage In Todays Economy
The rebound in the housing market has started to become a self-propelled recovery
, as its returning health has brought more people into the market and sales have begun to beget sales. One of the key factors in the improving market is the continuing-to-drop-to-record-lows mortgage rates, with 30 year-fixed rates hovering just above 3.5% at the time of this writing; which is bringing a lot of buyers back to the market. However, it seems that there hasnt been the rush of people getting a mortgage that one would expect with such historically low rates, as many qualified buyers do not seem to realize they would be eligible for a mortgage. The most common inhibitors for potential buyers are less-than-stellar credit histories, a misunderstanding of what kinds of down payments are required for getting a mortgage and not realizing what a solid investment these rates make for buying a home in the long run. Lets take a look at each of these and see if we cant dispel some of these common misconceptions and shed a little light on the process, as well as the ease, of getting a mortgage at a great rate.
Credit History: The Key to Getting a Mortgage
It is true that the last few years have not been kind to many peoples personal credit histories. Many potential buyers are concerned that a few late payments and inability to pay would prevent them from ever getting a mortgage. While your credit may or may not be good enough to qualify for a loan today, it is imperative to make that determination. The first step on the road to getting a mortgage is to speak with a Mortgage Specialist, they will help you by pulling your credit report and reviewing it with you. Your credit history effects what mortgage products and rates you qualify for. Understanding your credit history will give you the tools you need to make the best financial decisions your new home purchase. If there are items on your credit report that need to be resolved, your Mortgage Specialist will advise you on your best course of action.
Down Payments: Less Than You Think
One of the biggest obstacles for many people when faced with getting a mortgage is the fear that they will have to come up with a 20% down payment, a daunting task in this tough economic climate. However, this fear may be unfounded, especially for first-time homebuyers that may qualify for an FHA loan that only requires 3.5% down, an amount that is much easier to amass. Even if you arent a first time home-buyer, there are actually many government-sponsored loan programs for repeat buyers designed to make getting a home easier and more cost-effective, so it might be worth meeting with a mortgage specialist to find out your options.
Long-Term Advantages to Getting a Mortgage
While many of the advantages to buying versus renting are pretty clear (your money is BUYING you something, tax benefits, etc.), some might not be so readily obvious. One of the most consistent objections that real estate and mortgage professionals hear is the fear that lower-income buyers cant afford to purchase a home, or if they found a renter to share the burden, they might lose the roommate and thus extra income. This is a valid concern, but considering the long-term consequences of paying steadily increasing rent compared to a fixed-price mortgage that is anchored in the realities of todays low prices and interest rates, it is proven to be in the buyers best interest. It is important to keep in mind that getting a mortgage in todays favorable conditions will reap you economic rewards for decades if you manage your obligations right.
The bottom line is that the housing market is just beginning a return to health and buyers are staring at a very limited window of once-in-a-lifetime opportunity in the face. While prices have been rebounding somewhat, they have a long way to go before they reach the apex of the next boom. While getting a mortgage may seem like a daunting task and there are some hoops to jump through, you really cant afford not to take advantage of todays climate.
Need more information about financing a home? Speak with a Licensed Loan Originator at Homestead Funding today. The mortgage specialists at Homestead Funding can assist borrowers looking for all types of residential financing. Whether you are a first time home buyer or refinancing your current home, Homestead Funding can assist you. For a complete list of Homestead Fundings products visit the Mortgage Products page here. Homestead Fundings specialists are located throughout New York State, Connecticut, Massachusetts, Pennsylvania, Virginia and Maryland. To speak with a mortgage specialist near you, visit www.homesteadfunding.com/locations/search.cfm.
Homestead Funding Corp. is a multi-state licensed mortgage banker with branches located in New York State, Connecticut, Massachusetts, Pennsylvania, Virginia and Maryland. In operation since 1995, our corporate headquarters is located in Albany, New York where we have perennially been the area's largest independent mortgage lender. We have tens of thousands of satisfied customers, originated billions of dollars in residential mortgage loans and maintained a reputation of exceptional service, honesty, integrity and financial reliability. For more information, please visit online at www.homesteadfunding.com.
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