Thursday, February 25, 2016

Home Mortgage Myths

Home buying season is just around the corner, and I thought this would be a good time to share some insights for those looking into a new home mortgage or a re-fi.  According to my friend, Erica Kelley, of Caliber Home Loans, here are some of the most prevalent myths out there, along with the straight scoop:
Myth: You can't buy a home without a 20% down payment.  There are many mortgage programs that allow you to put down less.  Conventional loans start at 5%, and FHA loans can be as low as 3.5%.  There are also state grant programs like the THDA, which provides a grant to cover the down payment, or the USDA program, that is 0% down payment. 
Myth: You can't get a mortgage with a low credit score.  Depending on the lender, you may be able to score as low as 620 to qualify for a conventional loan, and as low as 580 for an FHA.  Review your credit report with a lender, so that you know exactly what is reporting.  In addition, lenders are also looking for foreclosures, collections, late payments, bankruptcies etc.  But even if your report isn't what you were hoping for, an experienced lender might have some strategies for increasing your score quicker than you think.
Myth: A "Pre-approval" is the same as a "Pre-qualification".  These are totally different animals.  Pre-qualified means you've provided preliminary information to a lender, who made initial calculations based on that information, to see what you might be able to afford.  To become pre-approved, though, you do need to provide documentation to your lender so they can review your income, credit, debt and assets to see what specific loans you may qualify for.  Of course, being pre-approved and ready to move forward gives you the advantage in the eyes of a seller with multiple offers.  Multiple offers are very prevalent in our market, especially in Nashville, Brentwood, Franklin, Nolensville, Thompson's Station, Spring Hill, and College Grove.
If you're in the market to buy or refinance your home, Erica can expertly guide you through the process.  Give her a call at 615-423-3095, or head over to her website at
David Yates Insurance Agency
1881 General George Patton Dr., Suite 103
Franklin, TN 37067
Phone 615-778-1816  Fax 615-778-1817

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