3 Mortgage Myths Debunked
By Sally Deneen
You might think that your best credit scores are used when you apply for a mortgage with a co-borrower. But that's a misconception.
In reality, lenders take the middle of your credit scores from Equifax, Experian and TransUnion, "then use the lowest score between both borrowers' 'middle scores,'" explains mortgage industry manager Julian Hebron, editor of the consumer finance and housing blog The Basis Point.
"So if you had a middle score of 780 and your co-borrower had a middle score of 660, most lenders would qualify and approve you using the 660 credit score," Hebron points out, adding there are some rare exceptions to this rule, so inquire with your lender.
Hebron debunks several other myths about mortgages, including these:
Myth: The rate you're quoted is the one you'll get. Reality: "Unless you're locking in a rate at the moment it's quoted, that rate quote can change. Rates are tied to daily trading of mortgage bonds," Hebron notes, "so most lenders' rates change throughout each day."
Myth: The rate quoted at the beginning of the pre-approval process is the rate you'll get. Reality: "Until you've found a home to buy, you can't lock your rate," Hebron explains, adding that the rate lock runs with a borrower and a property.
Real estate agent Brendon DeSimone contends that the biggest misconception for millennials is that buyers need a 20 percent down payment to buy a home. "It is possible to get a loan with as little as 3 percent down," he advises.
In Philadelphia, the median sale price was $172,300 in February. In the Philadelphia metro area, the median sale price is $228,375 as of February.
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