Interviewing the Experts: Mortgage Myths & Money-Saving Tips

Buying a home is an exciting journey, but navigating the mortgage process can feel overwhelming. To help clear up common misconceptions and provide valuable money-saving strategies, I sat down with a seasoned mortgage professional to get their expert insights. Whether you're a first-time homebuyer or looking to refinance, these tips can help you make informed financial decisions.

1. Common Mortgage Myths

• Prequalification ≠ Preapproval – Prequalification is a basic assessment, but preapproval involves a thorough financial review, making your offer much stronger in a competitive market.

• Lenders don’t cover all closing costs – While some costs may be included, buyers should budget for third-party fees such as appraisals, title insurance, and escrow charges.

• Appraisal vs. Home Inspection – Many assume they serve the same purpose, but they don’t. An appraisal determines the home's market value, while a home inspection identifies potential structural or safety issues.

• Lending rules aren’t always strict – Many buyers underestimate their eligibility. Lenders evaluate your gross (pre-tax) income, so you may qualify for more than you expect.

2. Biggest Mistakes to Avoid

• Too many credit checks – Shopping for rates is smart, but excessive credit inquiries in a short period can negatively impact your credit score.

• Skipping preapproval – Without a preapproval, you might be searching for homes in the wrong price range, leading to unnecessary disappointment or delays.

• RSU blackout periods – Tech employees should be aware of restrictions on selling restricted stock units (RSUs), which can impact down payment funds.

• Large deposits or fund transfers – Sudden, unexplained transactions in your bank account can raise red flags with lenders and delay loan approval.

3. Paying Points: Worth It?

• Staying long-term? Buying down your interest rate by paying points upfront can lead to substantial savings over time.

• Moving soon? If you don’t plan to stay in the home for many years, the upfront cost of paying points may not be worth it.

4. Rising Interest Rates? Here’s What to Do

• Know your budget – Instead of fixating on the rate, focus on your monthly payment and overall affordability.

• Build an emergency fund – A financial cushion ensures you can manage unexpected expenses or market fluctuations.

5. Overlooked Mortgage Factor

• Fixed vs. Adjustable Rate – Fixed-rate loans offer stability, while adjustable-rate mortgages (ARMs) can provide savings if you plan to move or refinance within a few years.

• Short-term vs. long-term goals – Choose a mortgage that aligns with your financial future and lifestyle plans.

6. A Simple Way to Save Money

• Boost your credit score – Higher credit scores often lead to lower interest rates, reducing your overall loan cost.

• Save for a bigger down payment – A larger down payment not only lowers your monthly mortgage but may also eliminate the need for private mortgage insurance (PMI).

Let’s Connect!

We understand that every homebuyer’s situation is unique, and making informed decisions is crucial. If you're interested in learning more or getting connected with a trusted mortgage expert, we’d love to help! Reach out to us today, and we’ll put you in touch with an experienced professional who can guide you through the process.

  Author: Susanna Leung

Susanna Leung’s goal as a real estate professional with Haylen Group is to help her first-time home buying clients find that perfect home where their families can grow, thrive, and live their dreams in the United States. She applies her experience in remodeling, resource networking, negotiations, and advanced marketing to provide her clients with dedicated, full coverage service.