Sponsored by Synergy One Lending

One of the most stressful parts of buying a new home is sorting out the deluge of conflicting advice on search engines and social media – not to mention from well-meaning friends and family.

But when it comes to financing your purchase, there is only one fail-safe way to separate mortgage myths from reality: Talk to your local lender.

Synergy One Lending (S1L) VP of Production Toby Arceneaux (NMLS #96596) and his team have been a trusted source in Louisiana for over 20 years. Arceneaux identified the five most common misconceptions that he and his team encounter as they educate consumers about the modern mortgage experience.

Myth No. 1: Mortgage interest rates are “historically high,” making this a bad time to buy or sell a home.

Reality: We were all spoiled by pandemic-induced mortgage interest rates that may never be that low again. Despite recent increases, they remain below past decades and the 50-year average.

“While interest rate can impact affordability, it is important to look at the bigger picture,” Arceneaux said. “The current rate environment actually benefits buyers by creating opportunities for negotiation on purchase price and concessions towards closing costs. This reduces the out-of-pocket funds needed to close. If rates were to drastically fall, home prices could increase due to the shortage of inventory, offsetting some of the benefits of a lower rate.  There is always the option to refinance to the lower rate in the future but in the meantime, you can start gaining the appreciation and accumulating wealth.

Myth No. 2: You need 20% down to get approved for a home loan.

Reality: This was probably true when your parents and grandparents bought their first house. But it hasn’t been a hard-and-fast rule in mortgage lending for many years.

“This is one of the most prevalent myths,” Arceneaux said. “There are many programs that allow for a lower down payment and some that are 100% financing, which means there is no down payment required. USDA rural redevelopment loans and VA loans for veterans often accept 0% down. Other programs are as low as 3% and in some cases, a gift from a family member can be used as the down payment. It is essential to consult with a professional loan officer to find what works best for you.”

Myth No. 3: Real estate agents and loan officers are interchangeable.

Reality: Not all agents have the same areas of expertise or offer the same level of service. Find a lender like S1L that has the right combination of people and technology to provide a consistent client experience that’s centered around your mortgage needs.

“Since home ownership is such a big financial decision, years of experience is a big factor,” Arceneaux said. “It is crucial that the lender and real estate agent work hand-in-hand to make sure you achieve your desired goals. Both the agent and the loan officer should be knowledgeable about the local market and have a proven track record. Look for someone who understands your needs and communicates effectively. The right agent and loan officer can make a significant difference in your buying experience.”

Myth No. 4: You need perfect credit to qualify for a home loan.

Reality: A higher credit score can qualify you for a lower rate. But lenders have a variety of tools at their disposal for helping motivated buyers overcome credit challenges.

“While having good credit can help you qualify for better loan terms, home ownership is not a privilege reserved for high credit borrowers,” Arceneaux said. “At Synergy One Lending, we offer FinFit, a credit fitness program that will guide clients to a path to build a better credit profile and assist you towards homeownership. It is just very important that you have a plan to improve your credit profile in the future.”

Myth No. 5: Renting is cheaper than buying.

Reality: In the very near short-term, maybe. Long-term, it’s not even close.

“Many people believe that renting is more affordable than buying because it typically involves lower upfront cost and no long-term commitment,” Arceneaux says. “But over the long term, the benefits of buying a home far outweigh the perceived affordability of renting. Each mortgage payment reducing the amount owed, coupled with the appreciation of the property value over time, is a great way to accumulate wealth. Although renting offers flexibility, it carries its own downsides – rising lease payments, management and ownership changes, the stress and expense of moving from rental to rental. Home ownership gives you a sense of permanence and belonging. We call it ‘Pride of Ownership’ – and that is definitely not a myth. Owning a home is the most satisfying investment you will ever make. Synergy One would be honored to help you make it wisely.”

Learn More About Synergy One Lending

Synergy One Lending, Inc., NMLS 1907235 | www.nmlsconsumeraccess.org| 610 W. Ash Street, Suite 1505, San Diego, CA 92101 | (888) 995-1256 | AL, AR, FL, GA Residential Mortgage License #70829, LA, MS, NC, SC, TN, TX. All Loans are subject to underwriting approval. Terms and Conditions apply. Subject to change without notice. Equal Housing Opportunity.

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