Mortgage Myths to bust

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With the plethora of mortgage and home loan information available online there are mortgage myths to bust! Here we go… Myth #1: You need a 20% down payment!    You can buy with 0% down on USDA and VA loan and as little as 3% down on a Conventional loan and 3.5% on FHA loan. While FHA and USDA loans have their mortgage insurance built in by HUD and USDA and VA loans with no monthly MI, Conventional loans with less than 20% down will still require some sort of MI.  However, what you might not be aware of is that the cost of MI for Conventional loans has fallen dramatically in recent years, it is much more affordable!  Busted!   Myth #2: You need to be debt free.   As long as your income supports the monthly obligations on your credit report and the new house payment, your loan will be approved.  Even IRS payment plans, and Alimony and Child Support payments are all acceptable debts, they must be disclosed to the lender and figured into your ratios.  Normal monthly bills that we all have, insurance, cell phone, cable, PG&E are not counted against you or part of the qualifying process.  Busted!    Myth #3: You need perfect credit!   To qualify for down payment assistance programs you need a middle score of 640 or higher, but there are other home loan programs for borrowers with scores as low as 580. If you think your credit needs some work or just want to confirm your scores, please reach out to a local lender now to run your credit so if you do have some work to do you can start now and be ready to purchase in a few months. Busted! Myth #4: Buying a home and getting a loan is no fun and super stressful! Finding the right home can actually be very exciting!  And, because you can complete much of the loan process BEFORE you find the right house, it does cut down on the stress. Being pre-approved is just smart! You shop with confidence knowing you can afford the homes you are looking at, and what the monthly payment will be and the cash you need to close. Most lenders can send your loan file through the underwriting process as if you were in contract so you can have a full underwriter approval before you shop. This allows the lender to write you a stronger approval letter to accompany your offer and make you stand out from others who haven’t taken this extra step.  At that point, all you must worry about is the home appraisal and other inspections if necessary. Busted! Interest rates have not risen as anticipated and makes home ownership more affordable. Call us to explore home ownership today! Written by Jenni Jacobs Garcia and Vicki Jacobs, a local mother/daughter lending team with Envoy Mortgage. We have offices in Woodland, Davis and our home offices in Winters, CA. Please reach out with any questions. You can reach Jenni at 530-312-6754 or jjacobs@envoymortgage.com and Vicki at 530-713-5017 or vjacobs@envoymortgage.com. ]]>

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