Are you in the market to purchase your first home? Congratulations! You’ve earned your slice of the American dream.
The process of buying a home is exciting and nerve-wracking. Becoming a home owner is a huge step in life.
As a first-time home buyer, you may not know much about the buying process. Aside from your realtor, mortgage lenders are extremely important. You want to ensure that the lender you choose has your best interests in mind.
Looking to learn more about mortgage lenders? Want to be an informed home buyer?
If so, continue reading! We’ll discuss the top 5 misconceptions about lenders.
1. My Bank Has To Be My Lender
As a first-time home buyer, it makes sense to stick to what you know, right? While you may have been with your bank for years, when it comes to mortgages, it pays to shop around.
Before choosing a lender, do some research. Find a lender that offers low interest rates. The lower your interest rate, the less your monthly payment will be.
Remember, lenders don’t consider bank membership or loyalty when approving a mortgage loan.
2. All Lender Fees Are The Same
Throughout the home buying process, you’ll be responsible for various lender fees. Common lender fees include:
- Credit reports
- Loan origination
Legally mortgage lenders can charge whatever they want. Some lenders may even waive certain fees to remain competitive.
Ask about these fees before choosing a lender.
3. Must Use the Pre-Approval Lender
Before looking at homes, you’ll need to get a pre-approved.
Pre-approval determines how much money a lender will loan you. In turn, this amount will dictate the price range of the homes you consider.
Did you get a pre-approval from a lender but want to get a loan from another lender?
If so, no worries! You are under no obligation to use the lender that provided a pre-approval.
4. Must Have a 5% Down Payment
Think you need a 5% cash down payment to get approved for a loan? Think again!
While some mortgage lenders require a down payment, not all do.
You will find that some lenders offer 0% down loans. With an FHA loan, you’re only responsible for putting 3.5% down. With a HUD loan, there’s no down payment!
Outside of government mortgage lenders, credit unions also offer low down payment loans.
5. Mortgage Lenders Won’t Approve Low Credit Scores
Your credit score does play a crucial role in getting approved for a mortgage loan. But, your credit score doesn’t disqualify you entirely.
If you have a low credit score, a lender may approve you for a loan with a higher interest rate.
Don’t give up hopes of owning a home because of a low credit score.
A Lender You Can Trust
Looking to buy a home? Want to work with a mortgage lender you can trust?
If so, Benchmark Mortgage is the company for you. We offer a variety of mortgage programs.
Take hold of your dream of owning a home!
Contact our team today to get pre-approved.