Busted! Don’t Believe These Mortgage Myths!
A mortgage is a huge financial responsibility, but it helps fulfill the homeownership dream for many home buyers. However, applying for a mortgage requires a thorough understanding of the housing market, and its rules continually change. As a layperson, going through complex mortgage procedures could lead to confusion and misinterpretation. Therefore, it’s best to enlist a mortgage broker’s services to relieve some of the stress and obtain assistance in applying and submitting necessary documents for a mortgage.
Unfortunately, several misconceptions exist that have created a cloud of doubt and prevent people like you from reaping the benefits of a mortgage. Accepting these falsehoods may also dissuade you from seeking assistance from a mortgage broker, eventually losing on purchasing the dream home you so desperately wanted to own. To help you avoid falling prey to these misconceptions, Quickfire Mortgage Solutions has debunked three of the most widely believed myths about mortgages.
Myth 1: Renting is Cheaper than Owning
Many people believe that renting is often cheaper than owning, but with interest rates at an all-time low and prices in Edmonton being reasonable, this couldn’t be further from the truth! Currently, to rent a two bed, two bath apartment, you can expect to pay $1200 per month (with utilities). If you owned that condo, though, your mortgage payment would only be $840 per month. Once you factor in the condo fee, which will include your utilities, your monthly payment would be around $1000, which still saves you $200 each and every month; that’s $2,400/year! On top of that, when you own, you are investing in your future. The real estate you purchased can be sold down the road, or you can even get a special mortgage product that will allow you to take out the equity you’ve paid into your home. You can’t do that by renting!
Myth 2: You Should Always Choose the Lowest Rate
A low rate is important, but it’s only one factor in your mortgage. Four main variables change between mortgages: your amortization period (how long you take out the mortgage for); the term (how long you are committed to that particular lender); your down payment; and finally, other factors such as payout penalties. A great example would be someone who may move in the next five years. For this individual, a lower payout penalty or a shorter term would be more important than a lower interest rate as when they go to break the term, if not appropriately planned, their payout penalty can be astronomically higher than what they would have saved from attaining a lower rate.
Myth 3: You Need Excellent Credit to Buy a Home
Of course, credit is essential in the mortgage application process, but it is not the be-all and end-all. At its simplest, your credit score is a numeric score given to you by financial institutions based on your credit use and repayment history. This score allows potential lenders to assess your risk factor; the higher your score, the less of a risk you are considered to be. With that said, there are a bunch of lenders that specialize in lending to those with low-to-no-credit meaning. There is a path to homeownership for everyone! Even those with past bankruptcies can get a mortgage!
If you’re looking to steer clear of these myths related to mortgages, reach out to me, Stefan Cherwoniak at Quickfire Mortgage Solutions. As a leading mortgage broker in Edmonton, AB, I bring a vast amount of industry experience to you. I have been in the financial industry for over twelve years, and I aim to help you find a mortgage solution with the best terms and rates for your needs.
I provide a wide range of mortgage services, including mortgage pre-approval, new home purchase mortgage, first time home buyers mortgage, mortgage refinances, mortgage renewals, income or rental property mortgage, home equity line of credit, self-employed borrower mortgage, and new to Canada borrower. My services are extended to clients across Edmonton, Sherwood Park, St. Albert, Fort Saskatchewan, Leduc, Beaumont, Nisku, Devon, Stony Plain, Spruce Grove, Calgary, Northern Alberta & the surrounding areas.