There are a lot of misconceptions about what it takes to get a mortgage in this market, particularly with buyers new to the mortgage process—and buying into those misconceptions can cost you a lot of time, energy, and, in some cases, money.
So what, exactly, are the most common mortgage misconceptions?
A recent article from realtor.com outlined some misconceptions many buyers have about securing a mortgage in this market, including:
- Applying for a mortgage is a quick and painless process. Getting your mortgage approved can be a long, drawn-out, and tedious process that can add weeks (or even months!) to your home purchase—particularly in this market, when many lenders are processing a high volume of applications. Anticipate that the process may take a while—and, on your end, do your best to speed things up by being as organized and timely as possible with your lender’s requests.
- You’re guaranteed to secure a low interest rate. Many lenders are still advertising crazy-low interest rates—but securing a rate like that typically takes near-perfect credit and a sizeable down payment. When applying for a mortgage, make sure you have realistic expectations around interest—and don’t waste time looking at houses that are out of your price range based on the idea that you’ll get a low interest rate.
- You don’t have to pay anything out-of-pocket to get a mortgage. Most mortgages have a variety of upfront fees and costs (like closing costs)—so, if you’re applying for a mortgage, make sure you set cash aside to cover those out-of-pocket expenses.
- Your favorite lender may not be able to lend in Mammoth Lakes. Many lenders cannot lend the majority of complexes in Mammoth Lakes. No matter what they tell you, they need to talk to your Realtor® first. After speaking with them and explaining the complexities of the market (ie, condo-tels, front desks, fractional ownerships) they most likely cannot. Your local Realtor® knows the lenders who can.
The takeaway — start the process EARLY and do not wait until you find the property you want to buy. Offers will not be accepted by sellers without either proof of funds (for cash offers) or a pre-approval letter. This link will take you to a list of lender with a proven local track record of success.