(I-BusinessNews.Com, January 13, 2015 ) Spanish Fork, Utah -- The New Year is about upon us and the housing market is looking to make a real come back this coming year. Many home buyers are likely wondering what to expect this next year and how they can come out ahead of the crowd. A good place to start is to separate the myths from the facts in obtaining a mortgage.
A mortgage banker for 16 years, Jon D. Christensen said, "As lenders, we want consumers to feel safe and comfortable with their decision to become a home-owner. Over the years, I have discovered five common misconceptions held by those who are new to the home buying process."
The following is a list of those 5 misconceptions or myths regarding buying a home:
Myth 1: 20 percent down is needed to buy a home: There are many great loan programs available for people who want to buy a home. Buyers can qualify for a loan with lower down payments such as FHA, VA and state housing programs. Some programs, such as VA loans, offer zero down payments.
Myth 2: Fear of judgment: Some borrowers fear that a lender will judge them when they apply for a mortgage loan. Perhaps this is because they don't fully understand the qualification process. In reality, working with a professional mortgage lender can be a smooth and easy process. Loan originators set clear and realistic expectations so that the process is not confusing. The goal is to educate borrowers and empower them to make the best decision for their future.
Myth 3. Pre-qualification versus pre-approval: Lenders know the difference between being pre-qualified and being pre-approved for a home loan, but consumers may not. When a home-buyer is pre-qualified, he or she has provided the lender with the basic information to determine which loan program the home buyer may qualify for. Whereas, when a home buyer is pre-approved, the lender has collected, verified and presented the information needed for underwriting and approval.
Myth 4. Income determines the loan amount: Many loan applicants believe that their monthly or annual income will determine the amount of money they can borrow to purchase a home. However, debt load is also an important factor. Before choosing a loan, borrowers should stop and consider their target monthly house payment. It is best to back into a loan and determine what you can afford to pay each month while maintaining your desired quality of life. It is also important to build unforeseen home repairs into the budget. This will help you avoid becoming "house poor."
Myth 5. Interest rate differentials: There is a lot of confusion when it comes to home loans. One of the most important things a lender can do is to help home buyers feel empowered and confident. Potential homeowners can better plan for the future by "qualifying themselves" and backing into the home loan process by knowing the impact of a home payment on their finances.
Mortgage Broker Jon D. Christensen states, "It is very important for a buyer to understand their personal budget and how a house payment will affect their financial situation. Purchasing a home is one of the biggest decisions in life: A mortgage lender should be a partner and a teacher. A company such as Security Home Mortgage in Utah defiantly strives to teach and partner with our clients."
According to Mr. Christensen there are many different factors that determine the interest rate for each buyer. It all comes down to choosing the right loan product. Borrowers should become educated about their options in order to feel empowered to choose the loan that best fits their personal, financial and qualification needs.
Once a consumer knows the best option, they can meet with different lenders to find the best interest rate for that specific loan product. Buyers who can qualify for FHA loans often have some additional options through their local state housing authority and USDA. Veterans may also qualify for favorable terms through the VA which are not available to the general public.
To get a FREE PDF extended version of this PR go to: http://jonshomeloans.com/5-myths/. About Jon D Christensen - Security Home Mortgage: Jon D. Christensen graduated from Utah Valley University in Business Management; he also holds a Master's Degree from Western International University in Human Dynamics. Jon has over 16 years of Mortgage Experience. Since 1993 he has worked with Security Home Mortgage (NMLS # 259074) in Spanish Fork and Orem, Utah. He takes pride in helping people realize their dream of owning a home, be it new or resale. Jon is available during normal business hours (MST) at 801-798-1581 or via email at firstname.lastname@example.org. He looks forward to serving your home loan needs.
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