We're here to handle the hard part.
The joy of buying a home is directly proportional to the ease of financing it. At Allen Tate Mortgage, we understand that, and so do the thousands of home buyers and refinancing home owners we help every year. As your trusted mortgage advisor, we're here to do what it takes to get you to the finish line, as quickly and easily as possible.
Know Your Mortgage Myths
1You need to have 20 percent down to purchase a home right now.
There are many program options for customers who have less than 20 percent down. Some programs include USDA Financing, FHA, VA and conventional loans with mortgage insurance.
A downpayment of 20 percent of at least 20 percent can certainly make it easier to obtain certain type of mortgage loans, but customers who don't have the full 20 percent downpayment do have financing options.
2A lender will confirm my tax returns with the IRS.
Your lender will ask you to complete a 4506T form, which will be sent to the IRS to get copies of your two most recent filings. These forms are compared to the information you have given to the lender, and they must match.
Your lender will ask you to complete a 4506T form which will be sent to the IRS to verify your income. But you must know those figures and give them to the lender before the forms are requested. What the IRS provides must match the figures you gave to the lender.
3There is only one true free credit report resource for consumers.
Although there are many credit reporting services advertised, the only true free service is available through the Government website: annualcreditreport.com
Don’t be fooled by sources that offer you access to your credit score or report for no charge. Most are trial or introductory offers for a subscription service with a monthly fee or other charges.
4FHA loans are only available for first-time homebuyers.
FHA loans may be used on any primary residence that qualifies within the FHA loan limits published each year by HUD. An FHA loan is a great option for many homebuyers to finance a home within these limits.
Anyone can apply for an FHA Loan as long as they are buying a primary residence within the FHA loan limits published each year by HUD for their county.
5My credit score only affects if I can be approved for a loan and not the terms of the loan financing.
Unfortunately, your credit score is a key piece of information used to determine if you are eligible for a home loan, your interest rate and the requirement for and cost of mortgage insurance. That’s why a good credit score is so important
Your credit score determines not only if you can qualify for a loan, but also the interest rate you may be offered. It can also impact the cost of mortgage insurance, if it is required.
6If I dispute something on my credit report, it will be resolved in one week.
Investigations take time. Credit reporting agencies have 30 days to investigate and respond to a credit report dispute.
Under the law, credit reporting agencies have 30 days to investigate and respond to a credit dispute. That’s why it’s important to review your credit report regularly and allow time to resolve disputes, before you are ready to make a major purchase like a home.
7If my parents want to give me with a financial gift as loan down payment, they must provide proof that they have the funds available to give.
FHA requires the donor sign a gift letter and show that they given the monies to the borrower. They must also provide proof that they have the funds available.
Incorrect. A gift from a family member is a convenient way to help secure the down payment for a FHA loan. But the donor must sign an affidavit indicating that they are giving the money as a gift, and provide proof that they have the funds available.
8Self-employed borrowers are required to have a two-year history of self-employment.
A two-year history is necessary to show someone is proficient at their profession and has proven the ability to manage a business.
If you have just started a business, there is no history to demonstrate to a lender that you are likely to be successful and are a good risk to repay a loan.
9The number of credit accounts you have is the #1 influencing factor on your credit score.
While we don’t encourage you to apply for dozens of credit cards, your payment history has the most impact on your credit score and demonstrates your ability to pay bills and pay them on time.
Lenders want to see a solid payment history of paying bills on time, with no recent late payments. Number of credit accounts is a consideration, but not the primary one.
10USDA Rural Housing loans are only available for properties in a rural area such as farming communities.
Not necessarily. USDA offers 100 percent financing for homes located in a markets defined by USDA with buyers meeting certain income restrictions. These vary by area. To determine program eligibility, please visit the USDA Rural Housing Loan website.
USDA offers 100 percent financing program for homes that are located in a defined market area, which may include but not limited to rural areas such as farming communities. There are income restrictions, which vary by area/county. To determine program eligibility for the program, please visit the USDA Rural Housing Loan website.