Home Loan Misinformation That May Be Misleading You

A home loan can be essential for allowing you to buy a house. Yet, these loans are often extremely misunderstood, and this can lead to home buyers making poor decisions and other mistakes.

Myth: Your Real Estate Agent Will Always Be Able To Help You Secure Financing

New home buyers may assume that the real estate agent will be responsible for helping them to secure financing. However, this is beyond the scope of the expertise of these professionals, and many states have laws that prevent real estate agents from coordinating with lenders. Furthermore, individuals are usually advised to go through the process of receiving approval for a loan before they start shopping for a house.

Myth: All Lenders Will Offer Roughly The Same Terms To You

The belief that lenders will all evaluate the same criteria when processing applications can be another misleading notion. Believing this can cause individuals to assume that all lenders will give them roughly the same terms, and this can discourage them from shopping around. While the process of applying for loans from multiple lenders can be tedious, it can yield surprising results as you may find that the costs of these loans can vary tremendously.

Myth: It Will Be Impossible To List The Home For Sale Until The Loan Is Fully Repaid

You may find that you will need to move before you have finished paying off the home loan. Fortunately, this is a routine situation, and lenders have policies to help individuals facing this dilemma. For example, it can be possible to coordinate so that the loan will be immediately repaid with the proceeds of the sale. This is the most common and convenient option for settling this debt. However, if the value of the home has fallen below the value of the outstanding loan, you may have to pay the balance out of your own pocket. Additionally, it is possible to arrange for the buyer to assume responsibility for the outstanding balance, but this will need to be agreed by both parties.

Myth: Refinancing A Home Loan Always Saves You Money

Homeowners are often bombarded by advertisements to refinance their homes. While refinancing can allow you to obtain a lower interest rate for your loan, there are many factors that must be considered when deciding whether to refinance. For example, you will have to ensure that the interest rate has fallen enough to justify the costs of refinancing as there will be fees and other costs with using a new loan to pay off the previous home loan.

For more information, talk to a home loan lender today.