Debunking Mortgage Myths: What Every Homebuyer Should Know This Fall

Home BlogDebunking Mortgage Myths: What Every Homebuyer Should Know This Fall

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Whether you're a first-time homebuyer or down-sizing as an empty-nester, the process of purchasing a home may seem overwhelming.

Let’s set a few things straight with the mortgage experts at MidwestOne Bank. Armed with some extra knowledge, you’ll have what you need to make an informed decision when buying your home.

Myth #1: You Need a 20% Down Payment

Many people believe that you need to put 20% down to buy a home. While putting 20% down can be beneficial, it's not always necessary. In fact, many mortgage options require as little as 3% down.

Myth #2: You Need Perfect Credit to Get a Mortgage

While good credit can help you qualify for a mortgage, it's not the only factor. Lenders consider a range of factors, including income, debt-to-income ratio, and credit history.

Myth #3: Pre-Approval and Pre-Qualification are the Same Thing

Pre-approval and pre-qualification are often used interchangeably, but they're not the same thing. Pre-qualification is an estimate of how much you can borrow, while pre-approval is a written commitment from a lender stating that you're approved for a specific loan amount.

Myth #4: You Should Always Choose the Lowest Interest Rate

While a low interest rate can be attractive, it's not always the best option. You should consider other factors, such as fees, terms, and customer service, when choosing a mortgage.

Myth #5: You Can't Get a Mortgage if You're Self-Employed

Self-employment doesn't automatically disqualify you from getting a mortgage. However, you may need to provide additional documentation, such as tax returns and business financial statements.

Getting the Facts Straight

Buying a home is a complex process, but it doesn't have to be overwhelming. By understanding the facts behind these common mortgage myths, you can make an informed decision and find the right mortgage for your needs.

At MidwestOne Bank, we're committed to helping you achieve your homeownership goals. Our experienced mortgage team can guide you through the process and help you find the perfect mortgage option for your situation.