There are many myths and misconceptions that float around the real estate sphere— from what it takes to qualify for a mortgage to how much of a down payment you need. In fact, these are what hold the majority of buyers back from making a move on their dream home!
As your local real estate experts in Anchorage and the Mat-Su Valley, Northern Edge Real Estate is de-bunking a few of these common myths associated with buying a home, so you don’t miss out on the opportunities available in today’s market!
Myth #1: Only your best credit score will be used
Unfortunately, this just isn’t the case when applying for a mortgage in Alaska. When you apply for a mortgage jointly with another borrower, the lender will take the middle of three credit scores from the three credit reporting bureaus, then use the lowest score between you and the other borrower’s middle scores. For example, if your middle credit score is 750 and your other borrower’s middle score is 720, the majority of lenders will base their decision on the 720 score.
Myth #2: All mortgages are the same
Purchasing a home in Anchorage, Chugiak, Wasilla and the Mat-Su Valley opens you up to many choices when it comes to mortgage types— and the typical 30-year fixed-rate mortgage is not the only one. Many buyers tend to believe a 30-year mortgage is their only choice, and while these may be common, they are not necessarily right for you and your situation. Remember that with a 30-year fixed-rate mortgage, the rate and payment are locked in, but the longer the loan is stretched out, the higher the rate will be.
If you’re planning to stay in the home for a shorter period of time—for instance, if you’re purchasing a starter home in Alaska or may move in the near future—an adjustable-rate mortgage may be the better choice.
Myth #3: The rate you are quoted is the one you will receive
One of the most important things you can do as a homebuyer in Alaska is shop around for a mortgage. You will need to gather rates and terms from different lenders throughout your search for a home to find the best option, but keep in mind that the rate you are quoted is not always the one you will lock in. Rates are subject to change and unless you lock in your mortgage rate the day you are quoted, the final number may be different. When you’ve found the right home, then you can secure your rate.
We look forward to hearing from you!