You are considering the option of buying a new home. You have sought for sound advices to help you in making your decision. Everyone you consulted had an opinion. Some of these advices have very good intentions. But these well intended advices might end up to be the worst you could possibly receive. The other problem is: you have no way of knowing that until you're there.
That's because there some "best known" myths about home buying and loan selection. You have to know what these myths are in order to avoid going through unnecessary troubles of repaying your home loan.
Myth # 1. When acquiring a home loan, your best choice is a 30-year fixed rate mortgage.
This myth is perhaps true when your parents or grandparents were considering buying a home. But this might not work well with you. Simply because there are many loan packages available for you to choose from. You have to look into your financial circumstances and needs and find which home loan package will work best for you.
Find out if a fixed-rate mortgage will be the right choice for you. Otherwise, you may choose other packages with adjustable terms which might make the most sense for you based on your financial situation. Your loan officer should be able to explain to you the differences between available packages and discuss which one will make the best sense for you based on your unique circumstances.
Myth # 2. Don't contact a mortgage professional until you have a home in mind.
Save yourself from heartaches. Do not fall in love with a home yet. Or else, you are entering into the worst time to contact a loan officer.
The best way to start your search for a home would be the mortgage professional. Tell him what the scope of the search would be. Specify your choice based on your financial means. Then, your loan officer would compare a house within your means with houses available for you to buy. By then you are relieved from buying houses your financial means cannot afford.
Myth # 3. The only place to apply for a home loan is with your personal bank.
This is perhaps true 40 years ago, but this is not necessarily true today. The mortgage market is a dynamic and competitive market. There are many lenders out there who specialize in home loan services but are not into retail banking. Don't close the door to the prospect of hiring the services of one of these lenders because more often than not, they offer better loan packages than most banks do.
Myth # 4. Online mortgage lenders are risky.
This is not always true. There many reliable online lenders; just be careful when selecting one. The safest online retailers are those ones that employ encryption. Most sites provide information regarding the measures they take to protect your information.
Often, these lenders are actually a network of lenders who combine their offers so you are given the leverage to choose the best possible home loan package.
That's because there some "best known" myths about home buying and loan selection. You have to know what these myths are in order to avoid going through unnecessary troubles of repaying your home loan.
Myth # 1. When acquiring a home loan, your best choice is a 30-year fixed rate mortgage.
This myth is perhaps true when your parents or grandparents were considering buying a home. But this might not work well with you. Simply because there are many loan packages available for you to choose from. You have to look into your financial circumstances and needs and find which home loan package will work best for you.
Find out if a fixed-rate mortgage will be the right choice for you. Otherwise, you may choose other packages with adjustable terms which might make the most sense for you based on your financial situation. Your loan officer should be able to explain to you the differences between available packages and discuss which one will make the best sense for you based on your unique circumstances.
Myth # 2. Don't contact a mortgage professional until you have a home in mind.
Save yourself from heartaches. Do not fall in love with a home yet. Or else, you are entering into the worst time to contact a loan officer.
The best way to start your search for a home would be the mortgage professional. Tell him what the scope of the search would be. Specify your choice based on your financial means. Then, your loan officer would compare a house within your means with houses available for you to buy. By then you are relieved from buying houses your financial means cannot afford.
Myth # 3. The only place to apply for a home loan is with your personal bank.
This is perhaps true 40 years ago, but this is not necessarily true today. The mortgage market is a dynamic and competitive market. There are many lenders out there who specialize in home loan services but are not into retail banking. Don't close the door to the prospect of hiring the services of one of these lenders because more often than not, they offer better loan packages than most banks do.
Myth # 4. Online mortgage lenders are risky.
This is not always true. There many reliable online lenders; just be careful when selecting one. The safest online retailers are those ones that employ encryption. Most sites provide information regarding the measures they take to protect your information.
Often, these lenders are actually a network of lenders who combine their offers so you are given the leverage to choose the best possible home loan package.
Source...