Buying A Home is Easy! Mortgage Myth Busting For Charleston Home Buyers
Buying A Home Is Hard
Buying a home is hard. It is the most difficult process to go through. It is terrible! At least that is what a lot of people tell you after going through the process themselves. The truth? It’s easy. You heard me… buying a home is not that hard! I know you think I am ‘pulling your leg’ as the southerners say but I am telling the God’s honest truth. I should know the truth because I am a Mortgage Banker. I handle residential mortgage loans like it’s my job... see what I did there? Jokes aside I bet you want to know how I can claim home buying is easy, especially if you’re a first timer and have no idea where to start.
That is where I come in and help you achieve a basic knowledge and understanding of what the mortgage process looks like and how you can best prepare to buy your first home.
Mortgage Myths
Let’s start with me taking down the top 3 mortgage myths. Today’s lending is not your parents lending. So here we go
• Myth #1: You have to have a 20% down payment to purchase a home
> Truth: So wrong! There are standard conventional loans that only require a 3% down payment. In addition to these low down payment loans there are also programs that are 100% financed such as VA and USDA (look up those bad boys) and of course state assisted down payments. This is where your local state government will assist you with a down payment. SC Housing for the win!
• Myth #2: You have to have an insanely high credit score like 700 or above to qualify for a mortgage
> Truth: Most banks will allow as low as a 580 credit score for FHA or VA financing (more acronyms I know but we’ll get into those next time)
• Myth #3: For the down payment, they have to be your own funds.
> Truth: There are many ways you can come up with the down payment whether is it 3%, 10% or 20%. You can receive a gift from a family member, wedding gift, withdraw from a 401K fund, state down payment assistance, savings, checking etc. Mortgage bankers are creative and have many ways to help you in this area.
Be An Educated Buyer
Now that we have done some myth busting lets tackle where to start the mortgage process and important subjects to make you a more educated buyer.
1. Start with a mortgage banker BEFORE starting with a Real Estate Agent. I promise this will be the most beneficial for you as a buyer. I don’t know about you but when I go shopping for something I want to make sure I can afford it. I never just waltz into Coach and pick up a bag, take it to the checkout only to find out its $300 and I can’t afford it. That is torture! You want to make sure you can afford your dream home before you see it... otherwise it is going to haunt you, believe me.
2. Be prepared to allow the Banker to take a full application for us to Pre-Qualify or Pre-Approve you before you go out on the home prowl. What’s a Pre-Qual or Pre-Approval you might ask? The simplest way for me to break that down is this
a. Pre-Qual: This is when a licensed loan officer takes a full loan application either online, in person or over the phone, runs your credit report and then runs the information through an automated underwriting approval system and everything checks out hunky dory.
b. Pre-Approval: This is when the licensed loan officer completes all of the above AND then reviews actual documentation and proof such as income and asset documents to back up the information you verbally or electronically gave them. Because we all know we can say anything but you gotta back it up!
c. Keep in mind 9/10 times when you put an offer in the Sellers agent will require the full Pre-Approval as a Pre-Qual is simply not as strong.
3. Now let’s talk about the most asked question a Mortgage Banker gets. I cannot tell you how many times I have answered my phone to be asked “What’s your rate?” Please do not let this be the first words out of your mouth when speaking to a banker. I will let you in on a little secret; the banker will roll their eyes and know that you are a first timer and typically do not know what else to ask. It is like going to a meat counter at the grocery store and asking how much meat is. There is more information that is needed before this question can be answered. Like which cut of meat? How many lbs.? Etc. The same goes for the rate! There is about 8 minimum pieces of information needed before a Lender can quote a rate, minimum!
4. Go in, meet with your banker and allow them to walk you through the mortgage process. It is a lot of information to take in but believe me it is worth it to take an hour out of your day to do this. My goal when I meet with a first time home buyer is to help them understand the process as best as I can. There are so many crazy acronyms to go through, different ways to structure a loan that meeting face to face can go a long way as far as giving you piece of mind when starting this process.
5. Lastly, breathe... just breathe. Everything is going to be fine and at the end of the mortgage process you get a home!! Your very own warm and cozy home. We are all on this crazy train called a ‘Mortgage’ together, good news is you get off the crazy train at some point while your Banker is simultaneously riding 10 – 15 crazy trains and never gets off :) But that is why we do what we do, we love it!!
Now, get your stuff together, call your trusty Mortgage Banker – me of course – and let’s get you ready to buy a home!!
Gabriella Heymans
NMLS:1439792
843-730-4242
Gabriella.heymans@lionbank.com
www.lionbank.com/GHeymans
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