There
are a lot of misconceptions (a.k.a. myths) that home buyers,
especially first-timers, encounter during the process of their real
estate purchase. Here are some of the most common ones debunked.
Myth
#1: You need perfect credit to purchase a home – Not
entirely true. While an individual’s credit score definitely has an
impact on the mortgage loan approval process and the subsequent
interest rate, a perfect credit is not a requirement to secure
approval for a mortgage loan. You don’t need a flawless, clean
slate. The higher your credit score, certainly, the more options
you’ll have to find a mortgage with good interest rates.
Myth
#2: Owning a home is pricier than renting - This
myth varies. There are a lot of markets out there where owning can be
as affordable as renting, especially if you consider the tax
advantages of owning a home. Rental costs increase over time, but
fixed-rate mortgages are much more consistent.
Myth
#3: Lenders share your personal information – Not
so. For a lender to share your personal info with an affiliate, he
will have to ask for your permission as locale-specific legislation
exists to protect your confidentiality.
Myth
#4: Lenders use only one scoring model to determine creditworthiness
– Numerous credit-scoring models are
at the lenders’ disposal to determine a buyer’s credit score.
These models vary, but all share the same conditions in determining a
score: the individual’s payment history and level of debt, among
others.
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