Four Common Misconceptions About Home Mortgages
Getting approved for a home loan is often times a stressful experience, especially for those who are already stressed about their finances. The mortgage lending industry can also be very complicated, and many people don’t have a great understanding of the different types of loans available to them, whether it be fixed rate mortgages or low interest home loans. They also don’t know how to determine the best mortgages for their particular situation. This is why many new homebuyers seek the help of a mortgage broker to guide them through the complicated process of finding the best mortgage lenders and securing the best home loan. There are many misconceptions surrounding the mortgage industry, and weeding out the truth from the lies can be tricky. Here are some of the most common misconceptions in the industry:
- All Lenders Charge the Same Fees – Many homebuyers are under the impression that all mortgage lenders are required to charge the same fee for certain services. However, there are no laws governing what they can and cannot charge for credit reports or appraisals. Many lenders won’t even charge a fee at all for certain services as a way to attract more customers.
- You Can’t Change Lenders – Another common misconception is that loan seekers are unable to change lenders after they have been pre-approved by a lender for a loan. There is no binding agreement that requires a person to go with the lender that pre-approved them for a loan. In fact, it is generally a good idea to get a few offers from various lenders before choosing one.
- The Best Mortgage Lenders Are Your Personal Bank – Sometimes a bank will give its customers a good deal on a home loan, but the truth is that most of the time homebuyers won’t get better interest rates on home loans through their personal bank. It is a good idea to get a quote from the bank, but people should always compare these quotes with a few others to find the best mortgage lenders for them.
- You Can’t Refinance an Underwater Mortgage – While it is not easy to renegotiate an underwater mortgage, there are government programs that can assist homeowners in this situation. The Home Affordable Refinance Program can help homeowners whose loan is through Fannie Mae or Freddie Mac, and the FHA Streamline Refinance program can help those who have loans through the Federal Housing Administration. These two programs help homeowners obtain lower interest rates and make it easier for them to pay off their loans.
These four common misconceptions about the mortgage industry could prevent homebuyers from getting their best mortgage possible. It is important for all new homeowners to understand their mortgage options so that they are able to make an informed decision. Learn more about this topic here.