Financing Myths

Myth: The "No closing cost loan" Also known as "The biggest no brainer in the history of earth"
Reality: The existence of this loan is not a myth, but it is usually accompanied by a claim that the mortgage company will pay the closing costs, not you. That is where the lie is.

Consider this: You may choose between 2 mortgages the same in every way except one has typical closing cost and a rate of 6.125% and the other loan has zero closing costs and a rate of 6.50%.
On a $200,000 loan you are paying $62.50 per month more with the second loan. After 5 years you will have paid over $3750.00. Does that sound like you aren't paying for it?
 
Myth: People who don't have a credit score, can't qualify for a mortgage.
Reality: While it's true many mortgages today require a borrower to have a minimum score, FHA does not require any score. Instead of a score FHA looks at how you've paid your housing bills. (Rent, Electricity bill, water bill, gas bill, phone bill) If you can show you've paid these on time for the last 12 months you may qualify. Other factors may also help, or hurt your chances. Call us for more details.

Myth: You shouldn't use the mortgage company recommended by your agent.
Reality: The fact is your agent wants your home to close on time. They have usually tried different mortgage companies and typically recommend those who are most reliable and have good customer service.

Myth: People are loosing their homes because of those interest only loans.
Reality: So many times people do not get pre-qualified for a home. So, they don't know how much they can afford. After they find "the perfect home" they speak to a loan officer (usually for the first time) and tell him they need the payment to be under a certain amount. Often, the only way to accomplish that is an interest only loan. So, they buy the home, JUST barely affording the payment and when the rate changes and their payment goes up, they may end up loosing their home.

Was it because of the type of loan? Or was because they bought a home they couldn't afford?