I was chatting with my dad about trying to get a mortgage, and he hit me with some advice that totally goes against what I thought I knew. I figured I'd share his myth busting list with you guys and see what you think.
Apparently, a lot of what we hear about mortgages isn't exactly true. Here are the myths he says can really cost you if you're not careful.
Myth 1, a 30 year fixed is always the best way to go. Yep, it's a myth, he says this is the most popular, but it's not the only way. You could pay it off way faster with a 15year, or even use an ARM to get a lower rate for the first few years.
Myth 2, you should pay off your mortgage as soon as humanly possible. Yeah, he thinks this is crazy. He says if you have a low interest rate, you're better off putting that extra money into investments where it can grow way faster.
Myth 3, you have to have at least a 20% down payment. This one surprised me the most! My dad says this is a total myth, and there are tons of loan options out there that let you put down way less.
Myth 4, you will always pay mortgage insurance if you don't have a 20% down payment. Dad says this isn't always true. Apparently, some loans and lenders have ways around it, but you have to know what to look for.
Myth 5, you can't get a mortgage if your credit score isn't perfect. My dad says that while a perfect score helps, you can still get a mortgage even if your credit has a few blemishes.
Myth 6, the mortgage term on the note is a hard rule. He thinks this is a simple one. You can always pay it off early or refinance. It's not a contract you're locked into for 30 years.
What do you all think? Is my dad right or wrong?
Apparently, a lot of what we hear about mortgages isn't exactly true. Here are the myths he says can really cost you if you're not careful.
Myth 1, a 30 year fixed is always the best way to go. Yep, it's a myth, he says this is the most popular, but it's not the only way. You could pay it off way faster with a 15year, or even use an ARM to get a lower rate for the first few years.
Myth 2, you should pay off your mortgage as soon as humanly possible. Yeah, he thinks this is crazy. He says if you have a low interest rate, you're better off putting that extra money into investments where it can grow way faster.
Myth 3, you have to have at least a 20% down payment. This one surprised me the most! My dad says this is a total myth, and there are tons of loan options out there that let you put down way less.
Myth 4, you will always pay mortgage insurance if you don't have a 20% down payment. Dad says this isn't always true. Apparently, some loans and lenders have ways around it, but you have to know what to look for.
Myth 5, you can't get a mortgage if your credit score isn't perfect. My dad says that while a perfect score helps, you can still get a mortgage even if your credit has a few blemishes.
Myth 6, the mortgage term on the note is a hard rule. He thinks this is a simple one. You can always pay it off early or refinance. It's not a contract you're locked into for 30 years.
What do you all think? Is my dad right or wrong?
