Mortgage Myths

There are a lot of ideas when it comes to low monthly mortgages that seem to be swirling around. It can be hard to separate fact from fiction, especially if you are not fully familiar with the mortgage business. In order to help you decipher what things are true and what things are just myths, we listed some common mistakes people make in getting a mortgage plan that could end up costing them more money than they realized.

Renting is Cheaper than Buying

When it comes to a mortgage plan, you can be sure that renting is never your best or cheapest option. The bad thing about renting is that you are putting money towards something without ever earning any equity on it. For this reason, after you have decided to stop renting, you will have wasted a ton of money has nothing to claim as your own. When you put your money toward buying a home, you will end up coming out on top because you are putting money toward a purchase. Thus, the myth that renting is cheaper than buying is completely false.

You Can't Get a Mortgage with Bad Credit

When it comes down to it, no matter what your credit report may read, you are always eligible to receive a mortgage plan. Many people end up finding very decent plans for their home mortgage even with bad credit. If this myth were true about bad credit meaning you cannot get a mortgage, there would be a ton of people left without a home. This myth is simply not true. You may be able to get a better mortgage and quicker approval with a good credit score, but if you don't have one, you should not worry at all about not getting approved.

Adjustable Mortgages are Not as Good as Fixed Ones

An adjustable rate mortgage, in which you are given a different payment from month to month and the time in which you have to pay back the entire mortgage is not set, is just as good if not better than a fixed mortgage in many instances. While a fixed mortgage plan may offer you more stability in knowing your payment from month to month, you may not be able to get a repayment or refinancing option like you would if you had an adjustable rate mortgage. Thus, sometimes adjustable rate mortgages can be better deals for you.