Mortgage Myths

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Myth: Once you’re pre-qualified, you’re guaranteed the loan amount.

During the pre-qualification process, your American Lending Solutions partner will look at your assets and credit report to decide how much of a loan you can anticipate being approved for. After taking a brief look at your finances, the lender can give you a general amount to adhere to when you begin your house hunt. At this point, the lender isn’t making a commitment to lend.

Myth: If you’re looking to save money, it’s better to rent.

Despite the common misconception that renting is less expensive than owning, paying a mortgage is almost always less expensive than renting a comparable home.

Owning your home also allows you to build equity. If you’re renting, once the lease is up, you are free to leave, and the money you paid throughout your lease term is gone. Owning a home allows you to build wealth slowly over time instead of throwing your hard-earned money away every month.

Myth: You should always pay off your mortgage as quickly as possible.

This may not be the best use of your money.

Rather than paying more into your mortgage each month, you may want to consider investing the extra money. American Lending Solutions can help determine what is best for you.

Myth: You can’t get a good loan unless you have a 20% down payment.

This is an old rule of thumb. Today, there are many options that American Lending Solutions can help you choose from. The Federal Housing Administration (FHA) offers mortgages with as little as 3.5% down. There are also no money down purchase programs available to qualified borrowers.

Myth: Thirty-year fixed-rate mortgages are always the best.

Although the 30-year fixed-rate mortgage is a popular option, it may not be right for you.

Adjustable-rate mortgages (ARMs) get a bad reputation because the interest rate can fluctuate. However, these types of loans have rate caps to limit how high the interest rate is able to go. If you’re not looking for a permanent home, some ARMs may be more suitable.

All situations are different. We’ll help you understand all the terms before deciding which type of loan is right for you.

Questions? Talk to an expert: (855) 257-5363