Purchasing a new home will be an exciting and scary part of your life. This is why you should do some research about the mortgage buying process. It will be a big purchase, so you should be wary before applying at Mortgage San Diego. Identify the common misconceptions about a mortgage to help you decide.
Myth #1: You should have a down payment of 20 percent of the asking price.
A lot of potential home buyers believe that the only way you can purchase a home is if you give the lender 20 percent of the asking price. The truth is, it would be great if you did give a 20 percent down payment, especially if you don’t want to pay private mortgage insurance monthly.
However, most mortgage businesses don’t really demand a down payment that is nearly 20 percent. Some only ask for a 3.5 percent down. If you want to ensure that you can handle your expenses, refer to the down payment calculator by Bankrate.
Myth #2: Your credit has to be in a perfect or almost perfect status.
Most home buyers think they have to have a high credit score to purchase a home. Even though a very good credit score can assist you in getting a better loan, it won’t really affect their decision. If you have bad credit, but you regularly settle your bills and earn a steady income, you don’t need to worry about anything.
Your lenders might look at your credit score, but some of them will let you apply even if your credit rating is as low as 620. A huge down payment and low debt-to-income ratio can compensate for your status.
Getting a home might be the great American dream, but make sure you can afford mortgage payments before making any rash decisions. Learn to balance your finances to avoid falling into debt.