Do you believe these mortgage myths?
Working with home buyers of all types, we have encountered some common myths about mortgages and buying a home that hold a lot of people back. And with rents what they are, buying a home may be the right financial decision for you.
So let’s bust some mortgage myths.
Myth: My credit score is too low. I’ll never own a home.
Truth: Not true! The FHA program works for people with scores in the 500s and 600s. With a down payment, adequate income and a solid two-year employment history, you could qualify for a home.
Myth: You have to have 20% to put down on a home, and with today’s home prices, I’ll never save up enough.
Truth: Completely false. Conventional programs like Fannie Mae’s Home Ready let you buy a home with as little as 3% down. If you qualify for government programs like VA or USDA, you might even be able to buy a home with 0% down.
Myth: I have student loans. I will never qualify.
Truth: Oof. It’s true, student loan debt can get in the way of buying a home. However, it’s not an insurmountable obstacle. Paying down and consolidating all other debt is a first step, and negotiating with your lender for the best possible repayment plan you qualify for is step two.
You want your total monthly payments for student loans, vehicles, and credit cards to be roughly 42%-50% of your total gross income. There are also programs which allow a non-occupant co-borrower (hello, Mom and Dad) to help you to qualify.
Myth: Down payment assistance programs are hard to qualify for, so why even bother?
Truth: Because you could be missing out on free money that will make it possible to buy a home, that’s why. There are programs for just about every scenario, and multiple organizations that can connect you with them here in the Willamette Valley and Portland Metro area. You can connect with a homeownership counselor who speaks Spanish, Russian, or Mandarin, and new funding is made available all the time.
Think you might be ready to buy a home? Call us at 503-588-0211 option 4 to speak to someone in the Real Estate Lending department, or click this link to make an appointment by phone.