Buying a home is an exciting journey filled with incredible possibilities! While the process might seem complex, it's really an opportunity to create your personal sanctuary, build wealth, and write an amazing new chapter in your life. If you’re just getting started, you may have heard some myths about the mortgage process. We're here to provide clear, actionable guidance that empowers you to navigate the homebuying process with confidence and enthusiasm by demystifying common misconceptions and offering expert insights. Together, we will turn your homeownership dreams into reality, celebrating every milestone. Your perfect home isn't just a destination—it's an adventure waiting to unfold! Let’s dive in and clear up some common misconceptions.
One of the most persistent myths about homebuying is that you need a 20% down payment to buy a home. While a 20% down payment has its advantages, it's not always necessary. Here’s why:
Another common misconception is that pre-approval for a mortgage isn’t necessary. The truth is that it’s actually a key step in the homebuying process. Pre-approval is generally more valuable when making an offer on a home, as it shows sellers you're a serious buyer with verified financial backing.
Pre-approval involves a more thorough review of your finances, including bank statements, a credit check, and income verification. It will also give you a more accurate estimate of how much you can borrow to purchase a home.
Many think their down payment covers closing costs, but it does not. Closing costs are separate fees for processing your loan—including title search and taxes—and are due at the closing table. Click here for a more in-depth look at what is factored into closing costs.
Having debt doesn't automatically disqualify you from getting a mortgage. Your Ruoff loan officer will look at your debt-to-income (DTI) ratio and calculate it by dividing your minimum recurring payments and other expenses by your total gross monthly income to estimate how much you can borrow for a mortgage.
Typically, you should aim for a DTI lower than 43%. However, depending on your unique financial situation, your lender may consider a DTI higher than this to tailor your loan to fit your needs. There are many loan options that allow for higher ratios, and your loan officer will be able to help you navigate which loan option may be best for you.
Many people believe they can't afford to buy a home. However, if you can afford rent, you may be able to afford a mortgage. Homeownership also allows you to build equity over time, unlike renting. For example, there are down payment assistance programs that may be available to you. Another misconception related to this, is that many believe these programs are for low-income buyers—fun fact: they’re not. Many assistance programs are available for various income levels and situations. If you think you will need down payment assistance, your Ruoff loan officer will be able to walk you through programs.
With the several steps it takes to obtain a mortgage, many tend to feel that it is overwhelming, but it doesn't have to be overly difficult or stressful. Working with our mortgage experts can help streamline the process and make it more manageable. Our Loan Butler online application makes it easy to apply for a mortgage, follow along with your mortgage milestones, print pre-approval letters, and more.
The mortgage process is reasonably simple, and your Ruoff loan officer will be there for you every step of the way, guiding you and supporting you to set you up for success as a homeowner.
Remember, every homebuying journey is unique. It's always best to consult with a mortgage professional to understand your unique situation and options.
Ready to get started? Contact one of our loan officers today, and let’s get you through your new front door.