Are you in the market for a new home? If you have been talking to friends and family or researching online, you have likely come across quite a bit of mortgage-related advice. As with anything, there’s lots of advice out there which is essential to avoid. In today’s blog post we will share four pieces of mortgage-related advice that you should take with the proverbial ‘grain of salt.’

#1: “Only Get a Mortgage From Your Bank”

One of the first things you might hear when looking for a mortgage is that you should only get one from the bank you already use. The idea is that because you have an existing relationship, the bank will offer you better terms or special rates. While it sounds logical, this isn’t always the best approach.

Banks often offer limited mortgage products, and their terms may not be the best fit for your financial situation. It’s important to shop around and compare different lenders, including credit unions and independent mortgage brokers. You might find a more flexible mortgage product elsewhere that suits both your current and future financial needs.

#2: “Always Take the Lowest Interest Rate”

It seems like a no-brainer: why wouldn’t you want the mortgage with the lowest interest rate? While interest rates are a crucial factor in your mortgage decision, the lowest rate doesn’t always mean the best deal.

Some mortgage products with low interest rates come with other unfavorable terms, such as high fees, shorter repayment periods, or restrictive conditions. A mortgage with a slightly higher rate but more favorable terms could save you money in the long run. Plus, you always have the option to refinance your mortgage later on if rates drop.

#3: “Borrow As Much As You Can”

Another common piece of advice is to borrow the maximum amount the lender is willing to offer you. After all, if the bank is willing to lend you the money, shouldn’t you take it? Not necessarily.

While it may be tempting to borrow as much as possible to get your dream home, keep in mind that a mortgage is a long-term financial commitment. You’ll need to repay every cent you borrow, along with interest. It’s better to borrow an amount that aligns with your financial goals and allows you to live comfortably, rather than stretching your budget thin just to afford a larger house.

#4: “Don’t Bother With Pre-Approval”

Some people may tell you that the pre-approval process is unnecessary, especially if you’re just starting to look at homes. But skipping pre-approval can be a costly mistake.

Many sellers won’t even consider an offer unless you can show proof of pre-approval, as it demonstrates you’re serious and financially capable. If there’s competition for a property, having pre-approval could give you a competitive edge over other buyers. It also gives you a clearer idea of what you can afford, saving you time by narrowing your search to homes within your budget.

The Bottom Line

When it comes to getting a mortgage, it’s essential to avoid one-size-fits-all advice. Everyone’s financial situation is different, and what works for one person may not be the best option for another. The key is to work with a trusted mortgage professional who can guide you through the process and help you make informed decisions that align with your long-term financial goals.

 And if you are considering selling your home, be sure to contact us at (850) 407-2024 or email us at bryce@pelicanbuyshomes.com so we can provide you with a Fair Cash Offer on your Nationwide house.

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