March 6th, 2017 6:39 AM by Jackie A. Graves, President
the spring home buying season just around the corner, it’s a good time to
separate fiction from fact.
Here are four common mortgage myths.
buyers must put down 20 percent.
Fact: “While that may have
been true a long time ago, there are a number of alternatives. Federal Housing
Administration-insured loans can have 3.5 percent down payments. Fannie Mae and
Freddie Mac both have programs with 3 percent down payments. One major lender
has come up with a program with a 1 percent-down mortgage, but there are some
significant restrictions on who qualifies for that program,” says David Reiss,
a law professor specializing in real estate at Brooklyn Law School.
Myth: My bank knows me, loves
me and will give me a deal.
Fact: “Mortgage lending is
regulated by nationwide underwriting standards that all lenders must follow.
Since virtually all lenders obtain money to lend from the secondary mortgage
markets, the mortgage rate one can obtain will be virtually the same regardless
of the lender chosen,” says Warren Goldberg, president of Mortgage Wealth
Advisors in Plainview.
Myth: Prequalification means
you’re approved and will get the loan.
is not a binding agreement. Lenders may require additional information before
issuing the loan. Pre-qualification gives you an idea of how much you can
borrow before you start looking at homes and shows sellers that you’re
committed and can afford the home,” says Bob Donovan, Bank of America’s
divisional sales executive for the metropolitan region in Manhattan.
Myth: I’ll close in 30 days.
Fact: “That’s rare now. The turnaround from
application to closing is about 50 days,” says Sam Heskel, CEO of Nadlan
Valuation in Brooklyn.
By Sheryl Nance-Nash - To
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