Mortgage Misconceptions By Hannah Stiff
B
efore the COVID-19 crisis dominated the news cycle, there was plenty of chatter about mortgage interest rates. They were falling low, low, lower. Those rates, dipping below 3% for certain buyers, enticed homeowners to refinance and homebuyers to hand over the money and sign on the dotted line.
These turbulent times undoubtedly impact the housing and lending industries. But there are still good rules of thumb to remember when you’re ready to wade into the home-buying process. And there are myths you need to combat with cold hard facts. Luckily, local lenders are eager to help you make sense of buying a home, especially in these uncertain times. To address some of the common mortgage misconceptions, I reached out to Colleen
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Wood, Branch Manager of The Wood Team at Fairway Independent Mortgage Corp. I spelled out some of the misconceptions heard around town and Wood answered back with the truth about those myths and answers to our burning questions.
which loan?
At Home: Is getting pre-qualified and preapproved is the same thing?
AH: I have student loan and car debt; I
Colleen Wood: Nope, prequalification is based on just a conversation and a credit pull, nothing is verified. A preapproval has been through underwriting and everything has been verified. Preapproval is based on satisfaction of some conditions, but the difference is, income, assets, credit, liabilities are verified.
CW: Not true. We need to come up with a
AH: Does shopping around hurt my credit score?
programs. It is a huge misconception that
CW: There is a 45-day window to “shop” where your credit pulls don’t affect your score if it’s pulled multiple times. AH: What kind of credit score do I need for
S O U T H W E S T M O N TA NA ◆ S P R I N G 2 0 2 0
CW: We have limited options below 620, but all other conforming products will have options above 620. Rural Development loans require a 640 credit score.
can’t afford to buy a home.
strategy. There are many. AH: I don’t have 20% to put down on a house, so I can’t get a loan. CW: We can do loans with VA and USDA that require nothing down. Buyers must meet certain eligibility to qualify for these you need to put 20% down. We have options with 0%, 3%, 3.5%, 5% on up. AH: My down payment is the only money I need to bring to the closing table. CW: There are lots of ways to get your clos-
