A Publication of Great Lakes Credit Union

1. A Publication of Great Lakes Credit Union 4 Myths ABOUT BUYING A HOME TODAY A HELPFUL GUIDE TO MAKE SURE YOU KNOW THE FACTS

2. TABLE OF CONTENTS • INTRODUCTION • Downpayments • Credit Score • Realtors • Interest Rates

3. INTRODUCTION The fact is, times have changed and buying a home today is completely different than buying a home in 2001. What was once true is no longer true anymore. This guide is to face some of the myths head-on and help you distinguish what actually is a myth and what is the truth.

4. MYTH #1 Downpayment You need a 20% downpayment to even have a chance to buy a home, and that can add up rather quickly for a large home. If you wanted a $500,000 house with 20% down. You would need to put down $1,000. Most people do not have that kind of money laying around. This myth is completely false. A downpayment can be very low. There are conventional loans requiring just 3% for a downpayment. Some VA mortgage programs for veterans will cover 100% of the purchase price. In the past, during the mortgage meltdown, 20% was in fact a necessity, but today most lenders are way more flexible.

5. MYTH #2 Credit Score Only those with the perfect credit score need apply for home mortgages. This is a complete myth. The past 6 or so years have been rough. High unemployment, a housing implosion, and other economic troubles. Just as you see these issues, the lenders do as well. Because of this, the lenders have a increased willingness to overlook past failings such as a foreclosure. Credit dings and blemishes, even a bankruptcy, short sale or foreclosure do not completely prevent you from getting a loan. Most lenders have a certain waiting period but after the waiting period, lenders have no problem offering you a new mortgage.

6. MYTH #3 Realtors Cut out the realtor, represent yourself and you will save 3%. That is just about never true. The realtor’s commission (around 5% to 6%) is paid by the seller. In most contracts that realtor agrees to “co-broker,” which means he or she will split his commission with a buyer’s agent. Most listing agents sign a contract with the seller for a certain commission percentage – for example 6%. They offer to share a portion of that if a cooperating buyer’s agent enters the picture – for example, 3% - but if there is no buyer’s agent involved, the full 6% is still paid by the seller to the listing agent. A persuasive buyer could negotiate a 1% cut or so by representing themselves. But saving the full 3% isn’t going to happen. Most people at the end of the day would agree that the fee associated with a realtor is worth the piece of mind.

7. MYTH #4 Interest Rates It is worth waiting it out for lower interest rates for purchases and refinances. Based on current projections, this couldn’t be farther from the truth. Based on current projections of the 10 year treasury which is directly related to mortgage interest rates, you can expect a 30 year mortgage rate to be between 5% and 5.5% in 2014. If you are considering refinancing or purchasing, it would be very wise to jump on the low interest rates while they are still in the low 4’s. Yes, the interest rates are not as low as they were in early 2013 but, the interest rates are still historically low. Any other myths that you would like us to discuss or questions that you need answered? Please feel free to contact GLCU and we will be able to clarify any of your questions.

8. 6600 Sylvania Ave Suite 6D Sylvania, OH 43560 419-246-5911 580 Craig Dr Suite 10 Perrysburg, OH 43551 419-246-5910 www.glcu.com Do you have any questions about a mortgage purchase ? Feel free to contact Kim Limes our Mortgage Manager. Kim has been in the mortgage business for 20 yrs. She has handled every aspect of the mortgage process from originating to processing to closing a loan. Kim can be reached directly at 419-246-5903