use a mortgage calculator to budget for a new homeA lot of first-time homebuyers believe a lot of things about mortgages that are not true at all. These myths can keep them from getting their dream house sooner. Some common myths about mortgages are mentioned here that are not entirely true and every individual should know about them in order to ensure that they get the best house and the best mortgage deal that suits them:

Pre-Approved Mortgage Cannot be Rejected

The belief that having a pre-approval on your mortgage means you won’t be rejected can be a big financial fiasco. Pre-approval only indicates that you have all the credentials that are required to get a mortgage approved, and gives you an idea of your possible financial scenario if and when your mortgage is approved. Using a mortgage interest calculator, you can easily calculate your own finances for your mortgage approval.

In reality, a mortgage is approved once you have finalized a house and things have finally come to closing. Therefore, it is very important to have a ‘subject to financing’ clause on your purchase agreement because if your mortgage is rejected and you don’t have the clause, you can be forced to pay penalties to the selling party.

You Have to Save For Down Payment

In every mortgage, paying at least 5% of the total amount of the purchase is mandatory for every individual. However, the concept that you are required to save up this entire amount before you can apply for a mortgage is not true.

Using a mortgage interest calculator, you can easily determine the impact different down payment amounts can have on your overall mortgage repayments.
Today, a lot of mortgage agreements offer you cash back options, returning you the complete amount of down payment at the time of closing. This gives you the liberty of borrowing money from someone for a short time period in order to pay as down payment and returning it when you get the amount from your lender.