We've all heard the "do's and don'ts" when it comes to mortgages. Do you know what's true and what's a myth? Take a look at the Top 5 Mortgage Myths below and get some answers:
1. I need to put 20% down to buy a house.
A down payment of 20% of the purchase price means you won't have to pay private mortgage insurance, but many people can't put down 20%. There are several different loan products available to fit your individual needs. Check out our mortgage calculator to see what works best with your budget.
2. Obtaining a mortgage loan is complex and confusing.
Entrust Financial Credit Union's mortgage department are experts in mortgage loans, and their goal is to make it easy and understandable to everyone - even the first-time home buyer. They will walk you through the entire process and explain what to expect, such as what is in your budget (check out our mortgage calculator), how much your closing costs are (typically 2-3% of the loan), and how long it will take to close on the loan (on average 4-5* weeks).
3. The lowest interest rate is always best.
Having the lowest interest rate does not mean you have the best loan. Some financial institutions charge excessive fees with their loans to offset any potential savings you might receive by a lower interest rate. Ask our mortgage department for information.
4. Fixed rate loans are always better.
If you don't plan to stay in your home for the entire loan period, have your lender run the numbers for adjustable loan rates, and discuss the impact of market conditions on adjustable rate loans.
5. There is a large up-front cost to refinancing a First Mortgage.
Actually, in most cases there is no money required at closing. The closing costs are financed into the loan.
*This is the average time it takes to close a loan. There may be circumstances that make the process faster or slower.