3 Mortgage Myths Homebuyers Should Not Believe

Some homebuyers receive inaccurate advice about the home buying process

3 Mortgage Myths Homebuyers Should Not Believe
May 5, 2016

When beginning the buying process, potential homeowners are often given advice by those who have purchased homes before. While some of this advice is certainly useful, some is unsubstantiated, and some is inaccurate to some degree. This may have had to do with the time the advice-giver purchased their home; indeed, they may have done so in a different financial situation under different mortgage guidelines. Regardless of the reason, homebuyers need to be aware that part of this advice boils down to myths about mortgages, rather than facts.

Myth #1: Getting pre-approved is not helpful. While being pre-approved for a mortgage is no guarantee of getting the loan later, it does send a signal to sellers that the buyer is serious about their offer. It also gives the buyer an idea of how large of a mortgage they qualify for, which will help them determine which properties they can afford.

Myth #2: It is easier to get a mortgage from the bank the borrower currently uses. While it may be more convenient, borrowers may be able to find a better deal on a mortgage from another lender. Buyers should always compare several lenders before selecting one.

Myth #3: Buyers should always select the mortgage with the lowest rate. While this is often the first inclination a borrower has, some low interest rates are offset by other factors. For example, the rate may be attached to an adjustable-rate mortgage, meaning it could increase within a few years.

Photo ©iStock.com/baranozdemir

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Steffanie | 05.05.16 @ 15:21
Being pre-approved sure helped us get our house quicker. I would encourage anyone looking for a hose to get that done.
irene | 05.05.16 @ 15:22
Great info, I never realized being pre approved was that important
Elaine | 05.05.16 @ 15:22
I have always heard to watch for adjustable rates. I think they try to be slick and sneak those in sometimes.
Carla | 05.05.16 @ 15:22
We fell for #3 and are paying for it. Our house payment has went up over $200 in the last 10 years. I wish I had not been in such a hurry to own a home.
Beverly | 05.05.16 @ 15:23
Interesting, I never would have thought about the lower interest, gonna have to tuck this one away for future reference.
Erin | 05.05.16 @ 15:23
Great tips and reminders for home buyers. They are all something I will be keeping in mind in case we decide to ever buy another house. Always look for the hidden fees because if it looks too good to be true, it usually is.
Nancy | 05.05.16 @ 15:23
Pre-approval is the way to go. I did and it made things so much easier.
$commenter.renderDisplayableName() | 12.01.20 @ 15:54