Dispelling Old Mortgage Myths

by Julie Pieczonka 10/20/2019

Myths are lies that are perceived to be true. Like every other industry in the world that has myths surrounding them, the real estate industry has its tales. People have ideas in their head about the mortgage industry that are not true. If you are buying a house and all you feel is happiness, then you might be working with a myth you heard and perceive as being real; same also applies if you are buying a home and all you feel is dread. 

Below are few mortgage misconceptions that many buyers and sellers mistake for truth:

You Need A Near-Perfect Credit Score

It's essential to have a high credit score, but lack of it doesn't mean you are out of the game. Even if you have some credit blemishes but always ensured you paid bills, you probably won't have a lot to worry. If you are bothered about your credit score, other factors could offset adverse credit. Depending on your loan type, each situation is analyzed differently. 

A Down Payment of Twenty Percent Is Needed

Compulsorily providing 20% of the purchase value of the home as a down payment is also a myth. Making a down payment of 20% is helpful in the long run, especially to avoid paying monthly insurance to a private mortgage. Presently, mortgage companies and banks provide loans to individuals without requesting for a down payment close to 20%. It all depends on your financial situation.

A House Is an Excellent Investment

A home could be considered as a long-term investment if you do not intend living in it – but then, nothing in the real estate business is guaranteed. If you purchase a house to live in for several years, it's better you don't think about it as a financial tool for padding your investment or retirement plan. Buying a house is part of your net worth, but you shouldn't count on getting a return after investing much money into the home. Something most home buyers fail to understand is that the value of houses appreciates at a shallow rate and can have negative growth for long periods. 

The House Belongs to You After You Get the Keys

It's one of the myths that homebuyers assume is true. When you purchase a house via mortgage; if you do not have equity or a significant amount as down payment, your bank owns your home. For as long as it's required to finalize payment for your home - including interest, the house doesn't belong to you.

The American Dream 

In as much as owning a home is supposed to be the American dream; it can also be the American nightmare. Acquiring a home via a mortgage and not being able to meet up with payment can turn out to be your worst nightmare. Owning a home is a decision that requires thorough thinking without jumping into any decision 

Buy a house if you can afford it but be sure you have your facts right.

About the Author
Author

Julie Pieczonka

Hi- I am Julie Pieczonka and I would love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. I would be honored to put my real estate experience to work for you. 

I am a retired fitness education and health education teacher.  I decided to satisfy a long-time goal of mine and become a Realtor. This continues my desire to serve others and am so fortunate to have had amazing success. I served as an Ohio & Indiana Realtor,  was a member of the Ohio Association of Realtor's President's Club 2015, 2016 & 2017; and a member of the Cincinnati Area Board of Realtor's Circle of Excellence Club 2015, 2016 & 2017. Realtor of the Year for Sellstate Platinum Realty in 2020.

My husband and I (and our two golden retrievers) have become permanent Florida residents as I acted as a referral agent only in Ohio and Indiana from 2018 through the present. 

I am actively practice my love for Real Estate here in the Sunshine State. 

I absolutely enjoy assisting my clients in one of the biggest decisions they will make in their lives —that's buying and selling real estate.

Cordially-

Your Active Agent,

Julie