Common mortgage myths ‼️
❌ You Need 20% Down To Purchase A Home
Many people, especially first-time home buyers, believe that if you don’t have at least 20% down, you can’t buy a home. This isn’t true. In fact, if you take out a conventional loan, you can buy a home with as little as 3% down. Some types of government-backed loans even have 0% down payment requirements.
❌ Prequalification Is The Same As Preapproval
The main difference between preapproval and prequalification is the level of verification your lender does before they issue you an estimate. As a general rule, you’ll want to get a preapproval before you begin shopping for a home. A prequalification can be a good first step to finding a lender you want to work with but being prequalified doesn’t carry much weight when you want to make an offer on a home.
❌ Your credit score needs to be at least 600 to receive a loan.
If you’re worried your credit score won’t qualify for a home loan, relax. There are options for borrowers who want a mortgage despite bad credit. For instance, borrowers with credit scores as low as 500 can qualify for FHA loans. VA loans usually require a score range of 580 to 660, but lenders look at your whole financial picture. USDA loans also have lower score requirements than conventional loans.
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