When it comes to mortgage lending, there are a lot of misconceptions that can make the process confusing. Our team of experts is here to help get you the information you need to make informed decisions every step of the way. Below, we’ve tackled some common mortgage myths to help you separate fact from fiction.
Myth #1 BUSTED: You don’t always have to make a huge down payment to qualify for a loan.
People often worry they won’t be able to afford a home because they’re unable to make a significant down payment. The good news? Rural 1st can finance most homes on acreage for as little as 15% down. And, we never charge for private mortgage insurance if you take out a loan with a down payment of less than 20% of the purchase price.
Myth #2 BUSTED: You can find financing for a nontraditional home, but not always with a traditional lender.
As nontraditional home styles like barndominiums continue to grow in popularity, we’ve received questions about financing these mortgages. While many lenders consider homes like barndos unconventional and do not offer traditional financing for them, Rural 1st can actually provide traditional financing for a post frame, log home or other structure.
Myth #3 BUSTED: Prequalification doesn’t hurt your credit score.
Prequalification and preapproval are not the same thing—they are two different steps in the loan process. Prequalification occurs early on and is used to determine whether you meet the basic criteria for financing, and provides an estimate of what you can borrow. Rural 1st conducts only “soft” credit inquiries for prequalification so your credit is not impacted.
Myth #4 BUSTED: ARM loans aren’t bad.
ARM stands for “adjustable-rate mortgage” and this type of loan locks you in at an interest rate for a predetermined period of time. Once that period has passed, your rate and monthly payment can fluctuate based on the market. An ARM may make sense if you plan to have the loan for only a few years and sell before the timeframe for your rate lock is up.
Myth #5 BUSTED: Interest rates aren’t the only important factor to consider when selecting a loan.
There are many factors you should consider when reviewing loan options. For example, a lender’s annual percentage rate (APR) is often a good determinant of what you can expect to pay on your loan. It includes associated fees and other expenses. At Rural 1st, we strive to be transparent and upfront about our loan terms and will always work with you to find an option to best meet your needs. Another benefit of working with a team like ours is that as part of our cooperative, you have access to additional advantages like customer education, our loan Conversion Program* and a partner that truly cares about the community.
Now with some of the common myths about mortgage lending dispelled, you can feel more confident if and when you decide to pursue financing. And, rest assured that when you work with our team, we will be here with you throughout your journey to ensure a seamless experience.
Ready to get started? Connect with a loan officer to get started today.
*Provided that eligibility requirements are met. Conversion has a one-time fee of $750.00. Terms and Conditions may apply. The fee is subject to change without notice.
