Buying a home for the first time can bring you all the excitement and joy. Many people get this excited feeling with varying giddiness due to anxiety and uncertainty. Besides, homebuyers don’t want their mortgages as scary. They can get the best mortgage rate and avoid the scariness if they hire a reliable Oakville mortgage broker. Additionally, there are five mortgage myths that homebuyers need to know about to avoid fearing mortgages in Oakville. We shall demystify those myths so that you can better prepare to buy a home in Oakville.
5 Mortgage Myths You Must Know About
Let’s begin our countdown:
Myth 5: I Can’t Afford to Invest in a Home
Do you pay a monthly rent successfully in Oakville? If you are paying your monthly rent consistently, the chances are you can afford to pay a monthly mortgage payment. One of the benefits of investing in a home over renting is that you are paying to own a property eventually. If you acquire a mortgage with a fixed interest rate, your monthly payments and rate will stay the same for the entire period of your mortgage. Understand it as follows: If your rent increases yearly, getting a mortgage will prove cheaper in the end.
You can talk to a mortgage expert to determine how much monthly mortgage payment you can afford. A mortgage broker can give you an accurate report of how much you can afford while reviewing your credit score. Hence, it’s only a myth that a first-time homebuyer can’t afford to buy a home in Oakville.
Myth 4: I Need 20 Percent Down Payment to Invest in a Home
Ideally, mortgage borrowers who give a 20 percent down payment initially find it easier to pay the remaining payment successfully. Still, many homebuyers don’t give 20 percent of the mortgage amount as a down payment to the lenders. The minimum down payment you need to pay to the lender is 5 percent for a home that costs $500,000 or less. The government programs exist for first-time homebuyers in Oakville, such as Canada’s First Time Home Buyer Incentive. Or, first-time homebuyers can hire a reliable Oakville mortgage broker to know their best options concerning mortgage down payments.
Myth 3: I Need Exceptional Credit to Get a Mortgage
Credit score plays a crucial role in getting a mortgage from a lender. Still, it doesn’t mean you need to have a faultless credit score to get a mortgage as per your budget. You can talk to a knowledge broker like Patrick Romann in Oakville to realize what will work best for you. Moreover, bad credit doesn’t mean you are an unreliable mortgage borrower. The pandemic might have affected your credit score. Nevertheless, talking to a knowledgeable broker can help you understand the steps you should take to improve your credit. Following the broker’s advice won’t only help you improve your credit but also make it easier to apply for future business loans, rental applications, etc.
Lenders will likely grant you a mortgage if your credit history is reliable. For example, they will make sure you pay your bills on time and stay on track to maintain a good credit score. If you’re new to Canada, you can use alternative credit sources. As an example: You may obtain a reference letter from your landlord establishing 12 months of rental payment history.
Myth 2: The Lowest Interest Rate Is the Best Option
First-time homebuyers think that getting a mortgage with a low-interest rate is their best option. A low-interest rate is an important thing to consider, yet there are other things to consider, as well. For example, the lowest interest rate doesn’t include the other fees that the lender may require. First-time homebuyers need to think about the closing fees, documentation fees, and other finance charges. You should consider the annual percentage rate when considering a rate for a mortgage. It will give you a clear idea of how much you must pay when you get a mortgage. The annual percentage rate includes all the aforementioned costs and depicts the accurate rate. Thus, the lowest interest rate for a mortgage in Oakville isn’t always the best option.
Myth 1: The Bank Is Your Best Option for a Mortgage
First-time homebuyers think that the bank is their best option for a mortgage. However, it’s a myth as mortgage brokers have access to more mortgage products than banks. Mortgage agents can provide you with more personalized options based on your mortgage needs. Contrarily, a bank only offers conventional mortgage solutions, whereas a broker understands both traditional and unconventional solutions. Hence, the bank is not the best option for a mortgage in Oakville.
There are five mortgage myths that first-time homebuyers have concerning mortgages in Oakville, mentioned below:
- I Can’t Afford to Invest in a Home
- I Need 20 Percent Down Payment to Invest in a Home
- I Need Exceptional Credit to Get a Mortgage
- The Lowest Interest Rate Is the Best Option
- The Bank Is Your Best Option for a Mortgage
Lastly, first-time homebuyers should consider hiring a reliable Oakville mortgage broker to find their best options for mortgages.