I hear things all the time, that as a Minnesota Based Mortgage Loan Officer, drive me crazy. Here are a few things that seem to be high on the need to be de-bunked list.
Myth #1 – Banks are not lending.
NOT TRUE: We are very busy! Mortgage companies continue to see a record number of home buyers applying and qualifying for mortgage loans, and refinance loans are still popular with our current low mortgage rates. BAD credit loans are not available, so I suppose if you are a bad credit customer, yes, banks are not lending to you.
Myth #2 – APR & Interest Rates are the same thing / Shop by APR
NOT TRUE: The interest rate is the price you pay to borrow money. APR (annual percentage rate) includes other fees that you may have financed into your mortgage loan, like closing costs and mortgage insurance. Don’t be fooled when shopping for a mortgage. When the rate is below everyone else, you are likely paying higher closing costs and discount points to “buy” that rate. Paying discount points is a personal decision based current cash flow, time in the property, loan-to-value, and more. Talk to your Minnesota mortgage lender to determine what financing options are best for your specific situation.
Myth #3 – You can be pre-approved for a mortgage without submitting documents.
NOTE TRUE: If you’ve been told you that are pre-approved for a mortgage loan, but you never sent W2’s, pay stubs, bank statements, etc to the lender, YOU ARE NOT PRE-APPROVED, regardless of what they tell you.