Five Myths About Mortgages

From the list of terms to the array of loan choices, the mortgage process can seem overwhelming and complicated. It also doesn't help that there are a lot of misconceptions about mortgages. Here are five of the most common ones:

1. Myth:  You need perfect credit to apply for a mortgage. Having excellent credit can certainly make qualifying easier and help you get the best rate, but it's not a requirement. Stock Yards Bank offers several mortgage loan products to help meet the needs of each buyer.
2. Myth:  A pre-qualification is the same as a pre-approval. Don't let the "pre" fool you; these are two very different things. A pre-qualification is simply an estimate of how much you could borrow based on the information you provide. With a pre-approval, a lender has verified your credit, income, and employment to conditionally approve you. A pre-approval can give you a negotiating edge with sellers because it shows that you are a qualified buyer.
3. Myth:  Always choose a fixed-rate mortgage. Fixed-rate mortgages offer many benefits, including predictability and peace of mind that your interest rate and payment won't rise. But depending on your situation, an adjustable-rate mortgage (ARM) may be a good choice for you. With an ARM, your mortgage interest rate starts low and increases over time. So, if you expect your income to rise, you may want to choose an ARM, which would make your payments lower initially and allow you to qualify for a larger mortgage, since lenders consider the lower payment when making approval decisions. ARMs are also ideal if you plan to live in your home for only a few years.
4. Myth:  You need to put 20% down. This is one of the most common misconceptions primarily because a 20% down payment is required to avoid having to pay private mortgage insurance (PMI). But for the actual down payment required to purchase a home, you may be able to put as little as 3% down with many mortgages. The Stock Yards Bank Right at Home Program also offers no down payment options. Keep in mind that the less you put down, the higher your monthly payment will be. Also, you may be required to pay PMI until you have 20% equity in the home.
5. Myth:  All mortgage lenders are the same. A good lender will help guide you through the process and help you choose the mortgage that's in your best interest. Meet Stock Yards Bank’s Mortgage Team, and let us help make your home ownership dreams a reality.
    

Subject to credit approval. Terms and conditions are subject to change. Speak to an officer for details.