Getting a mortgage can be tedious and frustrating process but it’s not as grueling as you think! There is a lot of misinformation swirling around about Cincinnati / Northern Kentucky mortgages, so this article’s purpose is to get to the facts of the matter. Below are 5 of the largest misconceptions about mortgages.
Mortgage Misconception #1: That You’ll Need 20% Down
There is financing available at 0% down for areas where the USDA will provide financing. Same thing for qualifying veterans. Kentucky and Ohio along with some other Northern Kentucky and South Eastern Ohio Counties and Cities offer down payment assistance programs that allow you to use the FHA loan program with a 0% down payment. as well. FHA requires 3.5% for loans when you are using a more traditional loan. 5% for most types of conventional loans. Also remember that down payment funds can come in the form of a gift for both FHA and conventional loans. Even for buyers looking at larger luxury properties there are options that only require only 10-15% down.
Mortgage Misconception #2 – You’ll Need Perfect Credit to Get a Loan
First of all what really is “perfect credit”,”terrible credit”, or “good credit.” All are subjective terms. In most cases 640 is a good place on the low end and 740 is spectacular! In some cases for some loans you can go below 640. It’s best to talk to a Cincinnati / Northern Kentucky realtor or mortgage specialist to see your particular situation. There are programs coming out for lower FICO scores all the time now. Some FHA borrowers can get loans with FICO scores in the 500’s. Bottomline: Don’t count yourself out. The mortgage process will be easiest for those with pristine credit but we all jump through hoops everyday. In all cases, it’s best to know where you are and then work for a better rating everyday. Call your Cincinnati / Northern Kentucky realtor today for help.
Mortgage Misconception #3 – Paying Off Your Mortgage Quicker is Always a Great Move
Savvy borrowers know that mortgage debt can be a great tool because home ownership offers tax advantages that renters just don’t get. If a mortgage is being paid at a rate of 3%, and an investor can get 8% on an investment, would they be wiser to eliminate that 3% debt (that comes with tax benefits) or to pad the balance of the investment returning 8%? These are the questions you need to ask yourself. Mortgage debt can effectively be used as part of your financial planning strategy. Future equity loans on your mortgages will give you a lot of leverage to do what you want when you want or need to do it. We suggest working with a good Cincinnati / Northern Kentucky loan officer and a trusted financial adviser that can help you decide your your financial future.
Here are just 3 of mortgage misconceptions. We hope that you now see that it’s just best to speak with a lender you can trust that has experience and many programs available. Your Cincinnati / Northern Kentucky Realtor will know many reputable lenders and advisors so sometimes they are you best first contact.
Tom Reese can give you advice on mortgages and who to contact to get the best information!
About Tom Reese
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