You need to be careful when you're on the market for a mortgage and avoid being swayed by inaccurate assumptions. The following are six things you shouldn't assume about your search for a mortgage.
You won't be able to find a mortgage with your income and credit score
A lot of consumers assume that homeownership is out of reach for them because they don't make enough money or because their credit score is not high enough. If you look for a mortgage loan, you might find that it's easier to qualify than you thought.
You should always try to find a mortgage before you assume that you can't qualify. This way, you won't overlook opportunities to own your own home.
You don't have enough for the down payment that will be required
For some consumers, saving up a large enough down payment is a more significant obstacle to homeownership than achieving an adequate credit score. Fortunately, some lenders will approve mortgage borrowers even if their down payment is not very large.
Don't make any assumptions about what percentage of the home value you will need to put down. You might find that you can buy a home with a much smaller down payment than you thought, so do your research and explore your options.
You'll be approved after being pre-qualified
You might end up being denied a mortgage loan even if you've previously pre-qualified. Being approved involves more stringent requirements than merely being pre-qualified.
Your credit score will be damaged if you apply with multiple lenders
It's not a good idea to only apply for a mortgage loan with one lender because you're concerned about credit report inquiries. While an inquiry might slightly lower your score, credit bureaus will generally cut you some slack if you have numerous inquiries within a short period while looking for a mortgage.
Your credit score will bounce back quickly from any decreases due to inquiries. Shopping around with numerous lenders is essential to finding the best mortgage offer, so don't worry about the inquiries.
You won't be able to pay off your mortgage early
These days, a lot of lenders offer mortgage loan agreements that give you the option of paying your mortgage off early without any penalties. This type of flexibility is really helpful when you're in a position to pay off all your debt before your mortgage term is over.
Your bank will give you a better deal on a mortgage than other financial institutions
Consumers sometimes make the mistake of only looking for a mortgage loan at the bank where they've been a client for a long time. You're not necessarily going to get a great deal from your bank just because you've been a customer there for a long time.
You might find that other companies will give you much better terms on a mortgage loan than your bank will. That's why shopping around is so important.
