6 Myths About Home Loans

homeloan2Are you looking to purchase a new home? Most likely, you will be looking to finance your home with a mortgage lender. Before you decide on how to finance your home—read the following.

MYTHS about home loans:

  • You don’t need homeowners insurance, FALSE. Mortgage lenders require that borrowers have home insurance when they are getting help financing their home.
  • Always choose a mortgage lender with the lowest interest rates. This is also false, cost is factor but sometimes additional fees can add up very quickly.
  • As long as your mortgage is less than 36% of your income, you can afford it. This rule is not completely true, because only you know what you can really afford. Track your spending and see how much you will actually have to spend on a home.
  • You will have to pay a 20% down payment. This is not exactly true. Realistically, not everyone can afford a 20% down payment. You can usually get a smaller down payment if you invest in PMI, which is private mortgage insurance.
  • All the money I need at the beginning is for a down payment. However, you will need to pay for the closing costs which can be about 2-5% of the homes purchase price.
  • Everyone will be able to write off the mortgage interest rates from their taxes. This is true to an extent; however, this tax write off may be less than you think.

Before purchasing a house, we hope you look over these 6 myths about home loans. Also, make sure you consult with your local agent here at Community Insurance. We are able to work with over 25 insurance companies that will allow us to find you a great price.

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