1. If you are in a situation where
your income is sporadic and would rather have the option of paying as little
as possible sometimes and then paying larger amounts when there is more
income, for example, a real estate agent or loan officer.
2. If you are investing your mortgage payment
savings in something else that is low risk, and has a much higher return
on your money than your house payment.
3. If you are temporarily in a situation
where your income will
be low for a while but then increase later
on.
4. If your mortgage is only temporary,
for example, an investor
looking to flip a property or someone
who is working on a fixer
upper. It would be good in any situation
where it would be in
your best interest to keep the payment
low as opposed to
creating equity in the home.
You have undoubtedly heard a plethora
of advice when you mentioned you were considering buying a home. Everyone
probably had an opinion, they always do. Some very well intended people
probably gave you the worst advice you could possibly have received but
you would have know way of knowing that.
Let us dispel some of the most common myths
about home buying and loan selection. First and foremost the myth that
the only type of mortgage to ever consider is a 30 year fixed rate mortgage.
Perhaps when your parents or grandparents first considered buying a home
this was true. The simple fact of the matter is that there are many loan
packages available to buyers with all different financial circumstances
and needs. For many a fixed-rate mortgage will be the right way to go.
For others adjustable rate mortgages will make the most sense based on
their financial situation. Your loan officer will be able to explain the
differences between them and discuss which will make the best sense for
you and your unique circumstances.
Another popular myth is that you should
have a home in mind before you contact a mortgage professional. This is
probably, however, the worst time to contact a mortgage professional. It
is always best to start your home search only after you have spoken to
a mortgage professional who can put a scope on your search for you before
you fall in love with a home that is well beyond your financial means.
A mortgage professional can save you hours of heartache when you try to
compare a house within your means to those houses a realtor showed you
but you simply cannot afford.
The only place you want to apply for your
mortgage is with your personal bank. Or, at least that is what you will
be told. Again, that may have been true about forty years ago, it is not
necessarily true any longer. The mortgage market is competitive and there
are many lenders that specialize in precisely this industry and are not
retail banks. You may not want to close the door to the prospect of using
one of these lenders because they very often offer the best loan packages.
Online mortgage lenders are risky. That
is what traditionalists will say. Though you should be careful in selecting
an online lender, there are many safe and reliable retailers. You will
want to make sure that they have an encrypted, safe site that you can comfortable
input your information. Very often these lenders are actually a network
of lenders that combined can offer you the most possible loan packages
to choose from. It is important to know that the site is encrypted and
safe before you input your personal information. Most sites will have information
on the site regarding the measures they take to protect your information.
If your credit is not great you will never
get approved for a mortgage is what you have probably heard time and time
again. There is an entire, tremendous industry that has been created to
provide mortgages to people with poor credit or no credit history at all.
Rather than have your friends and family deny the loan that you had not
even applied for yet, speak to a mortgage professional who has the means
to open the door to this entire world of lenders waiting for people with
little, no or bad credit.
If you do not have a big enough down-payment
your mortgage payments will be huge and you will have to pay PMI. Again,
this is simply not true. There are countless mortgage packages available
to people with little or no down-payment, including many packages that
combine loans in order to prevent your having to pay PMI (private mortgage
insurance).
The home loan industry is a vast industry
that grows annually. The key to your success in maneuvering in the industry
is to speak to mortgage professionals rather than well-intended but ill-informed
family and friends. Though your family and friends may offer good advice,
very often they just proffer myths that have long ago been busted. We have
addressed but a small number of these myths in this article, there are
countless. The best thing to do is get the information directly from the
source- a mortgage professional rather than the people around you who may
have misinformed you when they heard you are thinking of buying a home.
Author-Bio: Max Hunter is the author of
many credit related articles. If you are looking for help with Home Loans
or any type of credit issue please visit us at http://www.homeloanave.com
