BOSTON (TheStreet) — Do you think historically low mortgage rates guarantee the cheapest home loan ever? Think again. Here are five common mortgage myths and the sobering reality.

No. 5. Myth: 620 is the magic credit score.

When evaluating loan applicants, lenders pull credit scores from the three major reporting agencies — Equifax (EFX) - Get Report (Stock Quote: EFX), Transunion and Experian (EXPN.L) — and use the middle score to gauge eligibility. Indeed, 620 is considered the minimum eligible score, but it behooves applicants to aim higher to avoid paying more. Thanks to loan-level adjustments from Fannie Mae (Stock Quote: FNM) and Freddie Mac (Stock Quote: FRE), a 620 —or even a 680 — may result in additional fees. The adjustments get looped into the mortgage rates, which raises monthly payments.

Someone with a 679 credit score, who puts a 20% down payment on a $500,000 house, will end up paying about $11,000 in additional fees, compared with someone who has a score in the high 700s, according to Joe Heisler, president of the New Jersey Association of Mortgage Brokers.

(EFX) - Get Report (EXPN.L) No. 4. Myth: Once the bank initially approves your credit, you're home free and guaranteed a mortgage loan.

Not so fast. Under new "Loan Quality Initiative" programs from Fannie Mae, as of June 1, lenders must make sure an applicant's credit doesn't change between application and closing. This means that even after an initial approval, banks may pull the applicant's credit again, at the last minute, as few as five days before closing. If the credit has changed significantly for the worse, the bank may refuse to issue the loan, at the 11th hour — in which case the sale of the house will fall through. Caveat emptor: To ensure a credit score doesn't drop between the first check and the last one, don't finance a bunch of new furniture to decorate a new house before the closing.

(EFX) - Get Report (EXPN.L) No. 3. Myth: But for those with stellar credit scores, mortgage rates — and monthly payments —are historically low.

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Not if you're buying a condo. Buyers without a minimum 25% down payment may have to pay additional closing-cost fees equal to 0.75% of the loan, regardless of credit score, under rules that took effect last year. Those fees are often rolled into the mortgage, which raises monthly payments.

(EFX) - Get Report (EXPN.L) No. 2. Myth: A good income guarantees a good loan.

Not for freelancers, even successful ones. " Being self-employed has become tougher and tougher," says Dan Frommeyer, treasurer of the National Mortgage Brokers Association and a senior vice president at Amtrust Funding, a mortgage brokerage in Carmel, Ind.

(EFX) - Get Report (EXPN.L) This is true for a couple of reasons. One, it's easier for a lender to evaluate a few years of steady W2 tax forms than it is an erratic stream of 1099 forms. Two, freelancers have a habit of deducting everything in sight to keep taxes down. That's great when April 15 rolls around, but not so great when a mortgage broker is evaluating an applicant based on taxable income.

(EFX) - Get Report (EXPN.L) No. 1. Myth: The feds are successfully clamping down on foreclosures.

Not so much. The delinquency rate for mortgage loans on one- to four-unit residential properties increased to a seasonally adjusted rate of 10.1% of all outstanding home loans at the end of the first quarter 2010, an increase of 59 basis points from the fourth quarter of 2009, according to the Mortgage Bankers Association. The share of loans on which foreclosure processes started in the first quarter was 1.23%, up three basis points from the previous quarter. The total percentage of loans in foreclosure at the end of the first quarter was a record 4.63%.

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