Top 5 Mortgage Myths

Buying a home is never a small endeavor. With so much information out there, many people may not be able to tell fact from fiction. Lending experts at Greater Nevada Mortgage recently shared the top myths they hear and offered advice for where people can get the most accurate information before starting their home buying journey.

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“We have never seen rates increase this quickly,” James Anderson, Executive Vice President at Greater Nevada Mortgage, said. “The world now is a lot different than what we used to talk about in terms of housing. From limited inventory in the housing market to builders having trouble finding materials and labor, the ‘tea leaves’ aren’t showing the same indications as they have in the past.” GNM experts, Anderson, and Vice President Sales at Greater Nevada Mortgage, Al Crisanty, stress the importance of separating fact from fiction when entering the housing market.

Myth 1: Housing Costs are Out of Reach and, with Increased Mortgage Rates, I’m Never Going to Afford a Home

“The right time for someone to buy a home is a very personal decision,” Anderson said. “There are several factors that play into the home buying decision. Anyone needing or wanting to get into the housing market should not make assumptions and instead should speak with a mortgage lending professional.”

Anderson said that people who may not qualify now can learn from a lending expert who will lay out a plan for how they might qualify down the road.

“If buying a home is a priority, I encourage people not to throw in the towel before they speak with an expert,” Crisanty said. “While we still hear about bidding wars for homes in low inventory markets, home purchasers are beginning to pause and reset their expectations. They need to speak with one of our mortgage professionals to put pencil to paper and make sure that the purchase price they have been looking at still fits into their budget and long-term financial goals before moving forward. Although the changing rate environment is frustrating and disappointing for some borrowers, there is no need to panic or lose hope. There are many options and resources available and the first step is speaking with a mortgage expert.”

Myth 2: Home Buying is for Older Generations

Millennial homebuyers consistently make up 25% of the home buying market at Greater Nevada Mortgage and that number is increasing nationally, making up 43% nationally, according to a March 2022 NAR report.

“Savvy millennials have become creative as they search for their dream home and the right lending products for their situation,” Crisanty said. “Many are reducing expenses, adjusting their purchase price point or considering other mortgage loan options, such as down payment assistance, Federal Housing Administration (FHA), or adjustable rate loans.”

Myth 3: Online Mortgage Companies Will Offer the Best Rate

“Rates vary and the rates people find online aren’t always accurate for their scenario and may not be the best they can get,” Crisanty said. “I would never discourage someone from researching online, but nothing can beat sitting down to talk with a mortgage professional to see what’s possible as they look at your qualifications.”

Myth 4: You Can’t Buy a Home Without Putting 20% Down

There are down payment assistance programs available to qualified homebuyers in Nevada in the form of grants. These grants help homebuyers reduce the amount needed for a down payment and/or closing costs.

“We frequently tell people not to make assumptions,” Anderson said. “The other benefit to working with a lending professional is that they aren’t going to leave anyone high and dry. Our team members will sit down with anyone and, if they don’t qualify for a home right away, they help them put a plan together so they know what’s needed to make it happen down the road.”

Myth 5: People Should be wary of Home Equity Lines of Credit (HELOC)

“A HELOC solution can be a valuable and important tool for homeowners so long as they know and understand the pros and cons behind it,” Anderson said. “Unlike a mortgage, people who apply for and receive a home equity line of credit, only pay for what they borrow against. HELOC interest rates are variable and generally based on an index, known as the Prime Rate, and may or may not include a margin on top of that based on their qualifications. This means that HELOC interest rates can fluctuate throughout the course of the credit and cannot be locked in.”

APR = Annual Percentage Rate. APR is the cost to borrow money expressed as a yearly percentage. For mortgage loans, excluding home equity lines of credit, it includes the interest rate plus other charges or fees.

Rates and terms are subject to change without notice. Rates are for illustrative purposes only, and assumes a borrower with a credit score of 700 or higher which may be higher or lower than your individual credit score. Adjustable Rate Mortgage (ARM) loans are subject to interest rate, APR, and payment increase after each change period. For instance, a 5/5 ARM means that you will pay a fixed rate for the first five years of the loan, and then your rate is subject to change once every five years thereafter through the remainder of the loan. Interest rates and APRs are based on current market rates, and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Depending on loan guidelines, mortgage insurance may be required. If mortgage insurance is required, the mortgage insurance premium could increase the APR and the monthly mortgage payment. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit history up to the time of closing. The estimated total closing costs in these rate scenarios are not a substitute for a Loan Estimate, which includes an estimate of closing costs, which you will receive once you apply for a loan. Actual fees, costs and monthly payment on your specific loan transaction may vary, and may include city, county or other additional fees and costs. Not all loan options are available in every state. Borrower is responsible for any property taxes as a condition of the loan. Membership with Greater Nevada Credit Union is required for select loan options. This is not a credit decision or a commitment to lend.

Please contact a mortgage consultant to learn about all details on loan options and programs available. You may contact one directly, or call Greater Nevada Mortgage at 775-888-6999 or 800-526-6999. We do business in accordance with the Federal Fair Housing Law and the Equal Opportunity Act, and the California Fair Employment and Housing Act.

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