Whether it's a topic like the Vero Beach mortgage industry or another subject, we live in an information-rich environment. The Internet, 24-hour cable news stations and a burgeoning social media network keeps Americans in touch with available information almost instantly. Yet the endless wealth of information at our disposal also means there's a glut of misinformation being disseminated as well. Much of that half-correct, or in many cases, blatantly incorrect information concerns the housing market and the mortgage industry. Let’s look at a few commonly-held Vero Beach mortgage misconceptions.
Vero Beach Mortgage Myths Dispelled
Myth #1: You Have to Have Perfect Credit.
In a recent survey, nearly 67% of participants thought their credit had to be very good — nearly perfect — in order to qualify for a mortgage. The truth is there are loan programs available for borrowers with less than perfect credit scores. While it's true that a higher credit score helps in getting a preferred interest rate, even if you have a few credit bruises and blemishes you can still qualify for a home mortgage. Experts say there are other factors that lenders consider like employment stability, income and debt ratios. Remember, every loan situation is different.
Myth #2: You Have to Have a 20% Down Payment.
This is another popular misconception in the Vero Beach mortgage market. For decades lenders have made home loans to borrowers with considerably less than a 20% down payment. Borrowers can avoid the required private mortgage insurance (PMI) if they have a down payment of 20% or more, but many Vero Beach mortgage lenders have loan programs designed for purchasers with little or no down payment. Industry experts continue to encourage homeowners to think of their houses as a home meeting a certain set of needs at a particular point in time — not as a financial investment with a guaranteed return or appreciation.
Myth #3: A Home is a Great Investment.
Owning real estate can be a sound investment over time. However, there are no guarantees. Many variables must be considered that may affect your home as an investment. In addition to the continued appeal of the neighborhood in which your property is located, other factors may impact your home's value: the home's age, its condition, and market supply and demand.
Myth #4: You Own Your House When You Close the Sale.
The term "homeowner" is used loosely to describe those who have bought homes. However, the simple truth is — unless you paid cash or traded for some other consideration — the majority of homeowners are "still buying" their homes. Because a Vero Beach mortgage institution loaned you the money to purchase your home, you don't really own it until the mortgage is repaid. The old joke about "the bank owns it" isn't just a joke… it's true.
Myth #5: Home Ownership is the American Dream.
While aspiring to own a home is an important goal to many, it’s not everybody's cup of tea. A great number of people in the United States will probably never be able to buy a home — and many simply prefer not to own. Some survey respondents cite upkeep or maintenance issues, resale concerns, problems with job relocation and other reasons they are content to rent instead of own. The "American Dream" can turn into a veritable nightmare in a recessionary economy or crumbling job market. Sadly, millions of home owners who experienced foreclosures during the most recent housing crash would agree.
See more articles pertaining to the Vero Beach mortgage market in the Vero Beach Mortgage Info section, of our site below Vero Beach Real Estate Categories in the column to your right. Remember, we also post tips daily on Twitter and Facebook. Check us out there, too.